Moody's may downgrade Navios Maritime

Moody's Investors Service said it placed the ratings of Navios Maritime Midstream Partners LP under review for downgrade, including its B2 corporate family rating, B2-PD probability of default rating and the B2 rating on its term loan B due 2020.

The review follows news that Navios Maritime Acquisition Corp. has made an offer to acquire the publicly held units of Navios Maritime Midstream not already owned by Navios Acquisition in a stock-for-units exchange, Moody's explained.

The agency said it expects that if the transaction is executed as outlined, the pro forma leverage of the combined entity would be more than 9x as compared to 3.7x for Navios Midstream for the 12 months ending March 31.

The B2 rating on the $205 million term loan B due 2020 is in line with the corporate family rating primarily because the term loan comprises the majority of the company's debt, Moody's said.

The ratings reflect an expectation that, if the acquisition is successful, Navios will become a subsidiary of a company that has significantly higher leverage and is rated one notch lower, Moody's said.

Moody's said its adjusted leverage for the group will be about 9.2x pro forma for this transaction and is not expected to decrease until the tanker market recovers.

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