S&P: Overseas Shipholding still on watch

Overseas Shipholding Group Inc. announced that its acquisition of Stelmar Shipping Ltd. was approved by Stelmar's shareholders.

Standard & Poor's said its BB+ corporate credit rating and other ratings on Overseas Shipholding remain on CreditWatch with negative implications, where they were placed on Dec. 14, after the shipping company announced its acquisition plan.

Overseas Shipholding will finance the acquisition, which will cost $1.3 billion including $450 million of assumed debt, with cash on hand and borrowings under its existing revolving credit facilities.

S&P said ratings on Overseas Shipholding reflect the company's participation in the volatile, highly fragmented, capital-intensive bulk ocean shipping industry, and historically volatile earnings. Positive rating factors include the company's business position as a leading operator of tankers, with a diversified customer base of oil companies and governmental agencies, and a historically solid balance sheet.

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