Moody's rates Overseas Shipholding notes Caa1

Moody's Investors Service said it assigned a Caa1 (LGD6, 90%) rating to the senior notes of Overseas Shipholding Group, Inc. that are being reinstated under its plan of reorganization and affirmed its B2 corporate family rating, B2-PD probability of default rating and SGL-3 speculative grade liquidity rating. The outlook is stable.

The agency also affirmed OSG Bulk Ships, Inc.’s senior secured credit facilities due 2019 at B1 and OSG International, Inc.’s senior secured credit facilities due July 8, 2019 and Jan. 8, 2019 at B1 and Ba2, respectively.

Moody’s said the B2 corporate family rating considers Overseas Shipholding's leading position in the U.S. Jones Act and international crude and refined petroleum products freight shipping sectors and recognizes the reductions in fixed overhead that the company achieved while in bankruptcy, primarily by cancelling charter-in contracts for 25 international tankers, outsourcing the technical management of the international fleet and reducing shore-side headcount.

The stable outlook reflects Moody's belief that the fundamentals of the U.S. Jones Act petroleum transportation market will remain supportive.

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