Maersk cuts bond reliance

copenhagen — The world’s biggest container shipping company and Denmark’s largest issuer of corporate bonds may rely less on debt markets in the near future.

A.P. Moller-Maersk has ample liquidity and plans to cut capital expenditure, both of which reduce the need for new bond sales, according to chief financial officer Jakob Stausholm. He also pointed to the century-old conglomerate’s plans to sell its energy business as a complication that makes now an awkward time to tap debt markets.

“It’s a bit complicated issuing bonds at the moment because you need an open window and right now there are a lot of things we are

You need an open window [to issue bonds] and right now... finding an open window isn’t easy Jakob Stausholm, CFO of Maersk

working on so finding an open window isn’t easy,” the CFO said in a phone interview. “We are well-financed with a long maturity profile on our debt so our financing doesn’t require a lot of new issuance.”

Maersk issued five bonds in the first half of 2016, but hasn’t sold any since. Instead, the company has turned to banks for financing. Last month, the Copenhagenbased company announced it has established a syndicated loan facility to finance a $4 billion acquisition of container line Hamburg Sued.

“The bank facility was the right solution,” the CFO said. “We could tailor-make it so it fitted precisely the cash flow we expect in connection with the acquisition, which we couldn’t do with a bond. As we are working on so many changes, it’s convenient to get financing in place that fits the acquisition in exactly the right way.”

The conglomerate has given itself an end-of-2018 deadline to come up with a plan to list, sell or find another way to split off its energy units, which include Maersk Oil, and focus on its transport operations. These are led by Maersk Line, which carries more freight on its container liners than any other company globally. — Bloomberg