S&P affirms Overseas Shipholding

Standard & Poor's said it affirmed its BB corporate credit rating and senior unsecured debt rating on Overseas Shipholding Group Inc.

The outlook remains stable.

The company announced on June 9 a 40% increase in dividends to common shareholders, and the board of directors authorized a new $250 million share purchase program. The agency said these latest announcements represent a departure from its expectations and are evidence of a somewhat more aggressive financial policy. However, S&P affirmed the ratings because it expects credit measures to remain in line with original expectations as the company is benefiting from a favorable rate environment, particularly in the tanker market, and continues to shift to the fixed-rate time-charter market, which provides more stable and predictable revenues and provides cushion to their exposure to the volatile spot market.

The ratings continue to reflect risks of the competitive and capital-intensive shipping industry and the company's aggressive financial policies following acquisitions, share buybacks and higher dividends, S&P said.

Positive credit factors include satisfactory liquidity and a well-established market position in the ocean transportation of crude oil and petroleum products, the agency said.

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