ECONOMY

In Brief

Moody’s holds back on new ratings pending review Moody’s said yesterday it will not be issuing any new Aaa ratings on Greek structured finance deals and covered bonds until it completes a review of the potential impact of Greece’s fiscal problems on such deals. «While the risk of a government default is very low, as reflected in its A2 bond rating, the resiliency of private sector ratings, especially those higher than the government, to the stress associated with government financial difficulties must be thoroughly assessed,» the ratings agency said. Moody’s, which downgraded Greece’s sovereign bond rating to A2 from A1 in December, said the gap between the rating on government paper and the Aaa grade on private sector structured finance securities appears high. While reiterating that the risk of a disorderly exit of Greece from the eurozone is negligible, it said the country’s public finance situation has markedly deteriorated and is likely to remain highly challenging. As a result, Moody’s is reviewing its criteria that enable Greek structured finance deals to achieve Aaa ratings. (Reuters) Tanker companies may expand fleets after recession Tanker companies including General Maritime Corp and Tsakos Energy Navigation Ltd may expand their fleets after the recession sent ship costs to five-year lows last year. Prices for five-year-old very-large crude carriers, or VLCCs, dropped to $77.1 million on December 14, the lowest level since March 2004, according to price assessments compiled by the London-based Baltic Exchange. Tanker purchases may increase as the economy recovers from the worst slowdown since World War II. Oil demand will rise about 1.1 million barrels a day this year and 1.5 million in 2011, US Energy Department data show. «Ship values are low enough now that buying vessels can make sense,» said Jeffrey Pribor, chief financial officer of New York-based General Maritime. «The key now is not as much waiting for lower values as picking the right time to buy. We have some hopes that timing could be 2010.» Tsakos has $300 million on hand to purchase ships, said Paul Durham, the Athens-based company’s chief financial officer. «Our primary objective this year is to acquire vessels,» Durham said in a telephone interview. (Bloomberg) Cyprus inflation Cyprus’s consumer inflation jumped to 2.4 percent year on year in January compared to 2.0 percent in December, data showed on Thursday. On a monthly basis, the consumer price index fell by 1.97 percent in January to 110.38 units compared to 112.60 units in December 2009, mainly due to the January retail sales. Monthly decreases were recorded in the price of certain clothing, footwear and household items as well as a drop in the price of potatoes. (Reuters) Tender cancelled Cyprus’s tender review authority issued an interim order halting motorway contract talks with Austria-based Strabag after an appeal from a consortium including France’s Vinci, it said yesterday. Strabag, which bid for the contract in a consortium with Cyprus’s Nemesis, was handed preferred bidder status in January after the Cyprus Ministry of Communications and Works ended talks with Kinyras, the consortium including Vinci. (Reuters)