Moody's rates Overseas Shipholding notes

Moody's Investors Service said it has assigned a Ba1 rating to Overseas Shipholding Group's new $150 million 7.5% senior unsecured notes due 2024. All existing ratings of the company have been confirmed, including the $200 million 8.25% senior unsecured notes due 2013 at Ba1 and the $85 million 8.75% senior unsecured notes due 2013 at Ba1.

The outlook has been changed to stable from negative.

Moody's said the ratings continue to reflect moderate debt levels that have been modestly reduced over the past year, strong cash flow generation throughout the tanker market cycles, substantial liquidity, and a significant amount of unencumbered assets supporting the company's debt.

The ratings also consider the highly volatile nature of the international oil shipping markets and uncertainty surrounding ultimate use of the company's liquidity, particularly where acquisition of assets are concerned, and the impact of potential transactions on the company's credit fundamentals.

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