S&P rates OMI notes B+

Standard & Poor's said it assigned its B+ senior unsecured rating to OMI Corp.'s proposed $150 million debt offering. The outlook is stable.

The corporate credit rating on OMI Corp. reflects the company's significant, but carefully managed, exposure to the volatile tanker spot markets, an active new vessel construction program, and participation in the competitive, volatile, highly fragmented, and fixed capital-intensive bulk ocean shipping industry.

These negative factors are partly offset by OMI's favorable business position as a leading Suezmax and Product tanker operator with strong market share. In addition, the company's average vessel age is young compared to the world fleet.

Pro forma for the notes offering, the company will have about $20 million in cash and $230 million available under its two revolving credit facilities, which provide for about $450 million in borrowing capacity.

S&P said the outlook is stable. The company's base of fixed time charters (contracts for a vessel to a specific customer for a fixed period) and liquidity available under credit facilities should allow the company to maintain a credit profile consistent with the rating.

Downside risks are limited by the favorable near to intermediate term industry fundamentals and the company's solid market position. However, dramatic improvements are unlikely due to the ongoing fleet renewal program and participation in a competitive and cyclical market.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.