Rescue deal for shipping firm Torm credit positive for banks-Moody's
COPENHAGEN, Oct 9 (Reuters) - Ratings agency Moody's Investors Service said a rescue deal for Danish shipping group Torm A/S was positive for its lenders' credit ratings as they managed to steer clear of substantial costs related to any closure.
Torm's banks said last week they would take control of the shipping firm, extending repayments on $1.8 billion of debt and providing fresh funds to see the firm through the downturn.
Moody's said on Tuesday it had expected Torm's lenders - Nordea , Danske Bank , Danish Ship Finance and SEB - could have been hit with significant costs recovering already-depreciated collateral.
"The restructuring is credit positive because it avoids a wind-down," Moody's said in a statement.
The debt-laden tanker and dry-bulk firm has been fighting for survival in a sector slump, now in its fourth year, caused by a weak global economy, oversupply of vessels and low freight rates.
Moody's said the restructuring deal underlined the stresses many shipping firms and their lenders faced while problem loan ratios for banks' shipping portfolios remained elevated.
Last week's deal saw Torm's banks take a near 73 percent stake in the business, while time charter partners will get a 17.3 percent stake. Existing shareholders will retain 10 percent of the business.
Torm had been in talks with its 14 banks for months, trying to secure a comprehensive financing solution.
(Reporting by Mia Shanley; editing by Niklas Pollard)
Keywords: MOODYS TORM/