Maersk share buyback plan may cap gains of bond holders

[COPENHAGEN] Debt holders in AP Moeller-Maersk are looking on as the world's biggest shipping company uses its excess cash to enrich shareholders in a strategy shift that threatens to cap its bond gains.

Chief executive officer Nils Smedegaard Andersen said last week he will start the Copenhagen-based company's first ever "formalised" share buyback programme, purchasing US$1 billion in stock, or about 2 per cent of Maersk's market capitalisation.

According to Nordea Bank, Scandinavia's biggest lender, the move means there's now no prospect of the ratings upgrade some bondholders had been hoping for.