Citi Urges Shorting CMA CGM Bonds as New Shipping Capacity Threatens Freight Rates
Updated
Updated · Bloomberg · Jul 16
Citi Urges Shorting CMA CGM Bonds as New Shipping Capacity Threatens Freight Rates
1 articles · Updated · Bloomberg · Jul 16
Summary
Citigroup’s credit traders and analysts have advised hedge fund clients to short bonds issued by French shipping group CMA CGM, according to people familiar with the recommendation.
The trade rests on a later-2026 shipping-market view: more vessel capacity is expected to come online, which Citi believes will push freight rates lower and drag down the value of CMA CGM’s debt.
CMA CGM bonds have rallied this year as the Strait of Hormuz closure and uncertainty over the Iran war drove shipping rates sharply higher.
That call effectively bets the recent geopolitical boost to shipping debt will fade once supply growth in the sector starts to outweigh war-driven pricing support.