S&P lifts, withdraws Overseas Shipholding notes

Standard & Poor’s said it raised the ratings on Overseas Shipholding Group Inc.’s 7˝% election II senior unsecured notes due 2021 and 7˝% senior unsecured notes due 2024 to BB- from B- and revised the recovery ratings on the notes to 1 from 5.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The agency said it subsequently withdrew all of the ratings on the company’s 7˝% election II senior unsecured notes due 2021 and 7˝% senior unsecured notes due 2024.

Following a tender offer, a marginal amount of these notes will remain outstanding, including about $300,000 of the 7˝% election II senior unsecured notes due 2021 and about $390,000 of the 7˝% senior unsecured notes due 2024, S&P said.

All of the other ratings on the company are unchanged, the agency said.

The upgrade and withdrawal follow the completion of the partial tender offer of Overseas Shipholding’s 8 1/8% senior unsecured notes due 2018, 7˝% senior unsecured notes due 2024 and 7˝% election II notes due 2021, S&P said.

Pro forma for the tender offer, the amount of principal outstanding on the company’s unsecured notes has decreased by more than $225 million, or more than 65%, since December 2015, the agency added.

Due to the decrease in the company’s outstanding debt balance, the recovery prospects for the company’s remaining unsecured debt have improved, leading to the upgrade of the ratings and revised recovery ratings.

The ratings on these issues also were withdrawn due to a lack of market interest, S&P said.

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