Moody’s downgraded the ratings of Overseas Shipholding Group, Inc. (“OSG”), including its Corporate Family Rating (CFR) to B3 from B2 and Probability of Default Rating (PDR) to B3-PD from B2-PD, in anticipation of the spin-off of its international business/subsidiary, International Seaways, Inc. (INSW), previously named OSG International, Inc.
The separation is expected to be completed on November 30, 2016. Concurrently, Moody’s downgraded the first lien senior secured bank facility to B2 (LGD3) from B1 (LGD3) and OSG’s senior unsecured notes due 2021 and 2024 to Caa2 (LGD5) from Caa1 (LGD6). Moody’s also confirmed the Caa1 (LGD5) rating on the company’s senior unsecured notes due 2018. The ratings of the first-lien bank credit facilities borrowed by INSW (and guaranteed by OSG prior to the separation) will be withdrawn as those debts will accompany INSW upon separation. The SGL-2 Speculative Grade Liquidity rating was affirmed.
The ratings’ outlook is negative.
These actions resolve the review for downgrade that was initiated for OSG’s ratings on October 24, 2016.