New York-based tanker owner and operator Overseas Shipholding Group (OSG) on Tuesday was downgraded by Moody’s rating agency.
The decision came ahead of the imminent splitting of the firm into two independent companies, which is expected to be completed on Wednesday (November 30).
OSG’s domestic business will retain the company name while the international division becomes International Seaways, Inc.
Moody’s dropped OSG’s Corporate Family Rating (CFR) from B2 to B3 and its Probability of Default Rating (PDR) from B2-PD to B3-PD.
The agency put the downgrade down to OSG’s higher financial leverage plus uncertainties about the freight industry in the Jones Act market.
Most of OSG’s fleet of handysize product carriers and articulated tug barges (ATBs) is concentrated on Jones Act business i.e. cargo vessels that ply routes between US ports and on US waters, ships that must be US-made, US-owned, US-flagged and US-crewed.
International Seaways Inc will have one of the world’s largest fleets of crude oil and product tankers.
OSG’s stock price fell to a 52-week low on Tuesday going as low as $7.73 per share before ending the day at $7.95.