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Maersk (Baa2/BBB+): Back to the Wides

TRANSPORTATION
  • Following weak FY results last month we flagged that MAERSK bonds (31s) were trading through the Baa Index, with risk to the downside on tough market conditions.
  • After the unfortunate events in Baltimore, bonds are now back at the relative wide of the 1-year range.
  • Equity is only ~1.5% lower now over 2 days. Apportionment of liability will be complex given at least 3 parties are involved, with the vessel owned by a lessor and operated by a charter company.
  • Primary supply last month has probably loosened technicals on the name.
  • We turn neutral on MAERSK credit here.

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