STANDARD & POOR’S PUTS CP SHIPS ON “CREDIT WATCH”

STANDARD & POOR’S PUTS CP SHIPS ON “CREDIT WATCH”

STANDARD & POOR’S PUTS CP SHIPS ON “CREDIT WATCH”

   Standard & Poor’s has placed CP Ships Holdings Inc., the shipping business of Canadian Pacific, on credit watch with negative implications.

   Standard & Poor’s said that it is reviewing the credit rating of the shipping business of Canadian Pacific — currently “BBB.” It has placed the company on “credit watch” following the recent announcement by the Canadian Pacific group that it intends to split into five separate companies.

   “Due to Canadian Pacific’s involvement, CP Ships had greater access to capital and potential liquidity than most of its competitors” under the existing group structure, S&P said. “Additionally, CP Ships has a strong relationship with CP Railway through the key gateway of Montreal, and the two subsidiaries had a parent motivated to maintain the strength of each subsidiary.”

   S&P added that CP Ships had “benefited from a parent with a relatively large capital base and strong financial profile.”

   Ian Webber, chief financial officer of CP Ships, said that the company will retain its investment grade status. “Inevitably, Standard & Poor’s have asked a few questions, which we are confident to answer satisfactorily,” Webber said.