Moody's rates K-Sea notes B2

Moody's Investors Service said it assigned a B2 rating to K-Sea Transportation Partners LP's new $150 million senior unsecured notes due 2012. Moody's also assigned a corporate family rating of B1 and a speculative grade liquidity rating of SGL-3.

The outlook is stable.

Moody's said the ratings take into account the negative effect that the aggressive financial policies inherent in K-Sea's Master Limited Partnership structure have on the company's ongoing ability to reduce debt and fund maintenance capital expenditures and new vessel acquisitions. The ratings also reflect K-Sea's modest size, its concentrated geographic exposure and the numerous competitors, and the high ongoing expenditures for vessel maintenance and for replacement of the fleet.

However, the ratings also consider K-Sea's relatively moderate leverage and its leadership position in the niche tug/barge shipping sector in which it operates, the agency said.

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