S&P ups Overseas Shipholding notes to BB-

Standard & Poor's said it raised its issue-level rating on Overseas Shipholding Group's $119 million 8 1/8% senior unsecured notes due 2018 to BB- from B- and removed it from CreditWatch.

The rating was placed with positive implications on Dec. 3 because the company completed its early tender offer, resulting in a decline in the company's total amount of outstanding senior unsecured debt.

The agency also revised the recovery rating on the notes to 1 from 5, indicating an expectation for a very high recovery (90%-100%) in the event of a payment default.

At the same time, S&P withdrew its B- issue-level rating on Overseas Shipholding’s 7½% election I senior unsecured notes due 2021 because they were fully redeemed with the early tender. A marginal amount of the 7½% election II senior unsecured notes due 2021 and 7½% senior unsecured notes due 2024 remain outstanding but the agency anticipate withdrawing the B- issue-level ratings on these notes if they are fully redeemed by end of the tender offer period. The company expects to finalize the tender settlement on the 7½% election II notes by Dec. 31 and the 7½% notes due 2024 by Jan. 4.

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