Ports of Auckland on credit watch

S&P's has placed its 'AA-' long-term and 'A-1+' short-term credit ratings on the port company (POAL) and put it on CreditWatch with negative implications.

The move, it says, will weaken the company's financial measures.

"The proposed capital restructuring will be debt funded and is expected to increase POAL's total debt to total capital to about 50%, more than three times the level in fiscal 2001," S&P's says.

The ratings agency will spend the next three weeks resolving the CreditWatch, but says it is unlikely to rate the port below A+ level.

It says despite the growing competition from Port of Tauranga, POAL is well positioned to take advantage of the trend toward increasing cargo containerisation and to retain its market share.

"Global container trade is forecast to grow by about 6%-7% per year in the medium to long term," S&P's says.

POAL's shares were down 5 cents in morning trading on Thursday to $5.56, but on a low volume of 2,677 shares.

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