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S&P cuts Overseas Shipholding
Standard & Poor's said it lowered the long-term corporate rating on Overseas Shipholding Group Inc. to B from BB- and its senior debt to B from BB-.
The 4 recovery rating remains unchanged, indicating expectation that lenders will receive 30% to 50% recovery.
The outlook is stable.
"The downgrade reflects OSG's weakened financial profile, caused by prolonged revenue and earnings declines and a significant debt burden that we expect to increase somewhat over the next year, as the company funds $374.1 million in remaining capital commitments under its vessel new build program," S&P analyst Funmi Afonja said in a statement.
Ratings reflect the company's highly leveraged financial profile, the competitive nature of the shipping industry and the company's historically aggressive financial policy, the agency said.
Positive credit factors include adequate liquidity, a relative strong point in the company's financial profile and a well-established market position, the agency noted.
The company's business profile is weak and its financial risk profile is highly leveraged, S&P added.
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