S&P affirms OMI

Standard & Poor's said it affirmed its ratings, including the BB corporate credit rating and B+ senior unsecured debt rating, on OMI Corp.

The affirmation followed OMI's announcement Wednesday that it had agreed to acquire unrated Athenian Sea Carriers Ltd. Athenian Sea Carriers operates a fleet of four Suezmax tankers, with eight product tankers to be delivered through mid-2006. OMI will pay $393 million by August and assume $192 million of future vessel commitments.

OMI has stated that it will fund the acquisition with the proceeds from an offering of 12 million shares of common stock and the balance from new and existing debt.

S&P said ratings on OMI reflect the company's significant but carefully managed exposure to the volatile tanker spot markets, an active new vessel construction and acquisition 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 the Caribbean, Black Sea, and Mediterranean Sea. In addition, the company's average vessel age is young compared to the world fleet.

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