Moody’s reviews Overseas Shipholding

Moody's Investors Service said it placed the ratings of Overseas Shipholding Group, Inc. under review for downgrade, including its B2 corporate family and Caa1 senior unsecured ratings, and the B1 and Ba2 senior secured debt ratings of its subsidiaries, OSG Bulk Ships, Inc. and OSG International, Inc.

The review follows the company's announcement that its board of directors approved the plan to separate its business units into two independent public companies via a spin-off of the international business, OSG International.

The current debt at OSG International and at OSG Bulk Ships will remain with those entities post-separation.

Moody's also affirmed the SGL-2 speculative grade liquidity rating.

The review will consider the more modest scale of each independent entity after the spin-off, along with the loss of cash flow and business diversification from two separate businesses, the agency said.

The review will also consider the pro-forma capital structures, asset coverage and capital investment profiles, as well as the prospects for generating earnings and cash flow in the face of a softening freight rate environment. A downgrade of greater than one notch could be possible.

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