Standard & Poor’s improves Horizon Lines’ outlook
New York-based investment rating service Standard & Poor’s, has improved its outlook on U.S.-flag shipping company Horizon Lines to positive from stable.
At the same time, Standard & Poor’s affirmed the Charlotte, N.C.-based company’s “B” corporate credit rating.
“Ratings on Horizon Lines reflect its aggressive financial profile, modest financial flexibility, participation in the capital-intensive and competitive shipping industry, and an aging fleet,” said Eric Ballantine, Standard & Poor’s credit analyst.
“Positive credit factors include barriers to entry afforded by the Jones Act and stable demand from the company’s diverse customer base across its various markets.”
Last week, Charles G. Raymond, Horizon Line’s president and chief executive officer, announced plans to replace the current fleet with new vessels in an unspecified time-frame.
“The shipping industry is very capital-intensive. Although Horizon Lines’ vessels average over 29 years in age and its oldest vessels are over 35 years old, the company’s routine maintenance programs have kept its vessels in good operating order, although they are more expensive to operate than newer vessels,” Standard & Poor’s said.