Moody’s lowers Overseas Shipholding view to stable

Moody's Investors Service said it affirmed Overseas Shipholding Group, Inc.’s corporate family rating of B2, probability of default rating of B2-PD, first-lien senior secured of B1 (LGD 3), first-lien super priority senior secured of Ba2 (LGD 1) and senior unsecured of Caa1 (LGD 6).

The agency also said it affirmed the SGL-2 speculative grade liquidity rating and changed the outlook to stable from positive.

The outlook revision considers the softening freight-rate environment in the U.S. Jones Act and international petroleum transportation markets, Moody’s said.

The stable outlook also considers that the fundamentals of the Jones Act and international petroleum transportation markets will remain supportive over the next year, helping Overseas Shipholding to comfortably meet its debt obligations, the agency added.

The outlook change also reflects the potential impact of the recently announced plan to spin off the company's international subsidiary, OSG International, Inc., Moody’s added.

The agency said it anticipates that the company will sustain a financial profile and policy that supports the B2 rating level, anchored by the relatively stable dynamics of its remaining operating subsidiary.

There is a degree of uncertainty surrounding the spin-off, including the final capital structure, Moody’s added.

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