TEXT - Fitch says port credits resilient in face of labor action

Fri Dec 7, 2012 10:25am EST

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Dec 7 - Fitch Ratings has published a new special report titled 'Port Credits Resilient in Face of Labor Action'. The report provides a summary of the recent eight-day strike at the Ports of Los Angeles and Long Beach by the Office Clerical Unit (OCU) of the International Longshore and Warehouse Union (ILWU). The report also provides a brief analysis of the expected credit impact of a strike or work stoppage. While the strike has proved disruptive to logistics in the San Pedro Bay port complex and the Southern California region more generally, Fitch Ratings does not see a prolonged credit impact from the work stoppage. Key sources of financial protection enjoyed by both the Port of Long Beach and the Port of Los Angeles (both rated 'AA' by Fitch) include contractual minimum guaranteed revenues and flush cash positions. While labor issues represent an ongoing operational risk for maritime ports, it is Fitch's view that this risk can largely be mitigated through strong contracts with terminal operators and maintenance of adequate liquidity reserves, allowing ports to weather short-term interruptions in operations. The full report is available at 'www.fitchratings.com'.

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