Moody's downgrades Overseas Shipholding

Moody's Investors Service said it downgraded Overseas Shipholding Group, Inc.'s corporate family and probability of default ratings to B1 from Ba2 and senior bonds to B2 (LGD5, 71%) from Ba3 (LGD5, 73%) and affirmed the SGL-2 speculative-grade liquidity rating.

Moody's changed the outlook to stable.

The downgrade reflects Moody's expectation that the company's credit metrics, including leverage and interest coverage, will be more reflective of a single B credit profile for the foreseeable future, the agency said.

The ratings consider the company's position as a market leader in the majority of its trades, ongoing good liquidity, high operating leverage of the large crude carriers and anticipated improvements in fundamentals in the Jones Act trades against weak credit metrics, the agency said.

The stable outlook reflects Moody's anticipation that the company will maintain good liquidity for the duration of the current market trough and that its size and scope of operations strongly position Overseas Shipholding to improve its financial profile once the sector exits the trough, the agency added.

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