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Editor in chief: Angelo Scorza
20/03/20 10:36

MSC Crociere suffered a collapse of two bonds listed on the Stock Exchange of Zurich

The value of its debt securities was more than halved, while companies are facing huge costs related to the stop of their fleets due to the coronavirus pandemic

Unlike its main international competitors, MSC Crociere is not listed on the Stock Exchange, therefore it is not facing the same situation from a financial perspective (although the suspension of activities affected all the operators within the sector).

However, the shipping company established by Gianluigi Aponte suffered a collapse of two bonds issued in past years and listed on the Stock Exchange of Zurich: in the past month the exchange value of its debt securities was more than halved.

The MscCrus 16-21 bond amounts to 195 million Swiss francs, it was issued on November the 28th 2016 and it will expire on November the 28th 2021. The initial exchange value with which the bond was listed on the Stock Exchange of Zurich 4 years ago was 100 points. According to the SIX-Swiss Exchange official website, the bond always remained above such value, reaching the maximum peak of 105.5 in December 2019. In February 2020 it started a steady decrease, and its current exchange value amounts to 49.95 points.

Similarly, the bond MscCrus 17-23 issued by MSC Crociere on July the 12th 2017 and amounting to 335 million francs is listed on the Stock Exchange of Zurich, and it will expire on July the 12th 2023. Its value on the market remained above 100 points until February the 21st, when it started a steady decreased, leading to its current 30 points.

At present, however, the main international cruise groups are probably not focusing only on financial markets. In fact, the suspension of activities announced by all the leading companies will imply huge costs.

An expert of the sector explained to Ship2Shore that at present all the ships stopped, but they are ready to sail again within one month, hoping that the situation will improve quickly. This means that crew members are onboard, that generators are working and that ship galleys are being supplied, and this implies costs, as well as port expenses, and office, administration and financial costs. However, at present companies are not recording profits.

Providing an exact estimate of the economic impact of this situation is very difficult because costs vary according to the size of ships, but repercussions will be huge. Probably, without external support companies will not be able to survive in this situation for more than 6-9 months. Similarly, all the main companies within the sector have probably already asked their lenders to grant suspensions, deferrals of deadlines and possible debt restructurings.