US Bans Imports From Chinese Fishing Company Citing Seafarer Welfare
By David Lawder (Reuters) – U.S. Customs and Border Protection on Friday imposed a new import ban on seafood from a Chinese fishing fleet that the agency says is using...
(Dow Jones) Moody’s Investors Service lowered its outlook on Teekay Corp. (TK) to negative from stable, citing concerns about management’s plan to use more equity capital when funding investments or possible asset sales to one of several publicly listed subsidiaries.
The ratings firm said weak fundamentals in the conventional tanker industry have led to significant operating losses in Teekay’s conventional tanker operations, which have dragged down earnings and operating cash flow, putting pressure on already-weak credit metrics.
Moody’s anticipates Teekay’s various entities will continue to pursue asset acquisitions and new projects because of Teekay’s objective to grow the value of its general partner interests in the subsidiaries. But Moody’s warns how such investments are funded will be important to determine if the B1 corporate family rating, already four notches into junk, can be maintained.
Teekay, which provides marine services to the petroleum industry, has posted mixed results in recent quarters as derivatives have affected its bottom line and a glut of tanker space pressures spot market rates.
Moody’s B1 rating reflects Teekay’s position as a leading provider of seaborne transportation of oil and refined petroleum products, though particularly high leverage and sustained high debt balances are concerns.
Teekay, which in May reported it swung to a first-quarter profit primarily due to derivative gains, has spun off several operations in past years and holds stakes in Teekay LNG Partners LP (TGP), Teekay Tankers Ltd. (TNK) and Teekay Offshore Partners LP (TOO).
Teekay’s shares were inactive after-hours at $28.67. They’ve gained 7.3% in 2012, narrowly better than the S&P 500.
– John Kell, Dow Jones Newswires
Join the 69,494 members that receive our newsletter.
Have a news tip? Let us know.