Alpha Shipping Rtgs Lowered To 'B' By S&P; Off Watch.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/22/98-- Standard & Poor's today lowered its long-term corporate credit and senior unsecured note ratings on Alpha Shipping PLC to single-'B' from double-'B'-minus. At the same time, the ratings are removed from CreditWatch, where they were placed with negative implications on July 15, 1998. The outlook is stable. The rating actions reflect significant deterioration in Alpha Shipping's capital structure and the company's limited financial flexibility in the face of continuing decline in freight rates Noun 1. freight rate - the charge for transporting something by common carrier; "we pay the freight"; "the freight rate is usually cheaper" freightage, freight for the majority of the shipping markets in which Alpha Shipping operates. The severely depressed dry-bulk shipping market has had a particularly strong negative effect on Alpha Shipping. Earnings and cash flows are likely to be pressured in the short term owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de poor near-term prospects for the dry-bulk, reefer reef·er n. Marijuana, especially a marijuana cigarette. , product, and chemical tanker
Ocean-going chemical tankers generally range from 5,000 to 40,000 dwt in size, which is considerably smaller than the average markets. Alpha Shipping has a fleet of 10 dry-bulk carriers, six crude oil tankers, two product tankers, two chemical tankers, seven reefer vessels, one feeder container vessel, and one OBO OBO Or Best Offer (used in for sale ads) OBO On Behalf Of OBO Oboe (music scores) OBO Observation (UK) OBO One By One (animal rescue) (Ore-bulk-oil) carrier. The average age of the existing vessels is about 20 years old. Alpha Shipping's relatively large fleet size is, to some extent, positive, and enables the company to benefit from advantages of scale. Furthermore, as the second-hand vessels may develop unexpected mechanical and operational problems a large fleet reduces the company's overall risk. Alpha Shipping's long-standing relationships with a diversified customer base all over the world reduces the risk that its vessels will be unable to find employment. The shipping industry's risk profile is characterized as speculative grade (double-'B'-plus or lower) because of volatile price swings, and Alpha Shipping is, to a large extent, exposed to freight-rate volatility as it charters most of its vessels on a spot-charter basis. Alpha Shipping's capital structure is aggressive following its note offering at the beginning of 1998, with net debt leverage of about 89% at the end of June 1998. Earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) coverage of net interest is expected to be weak in the short term (it could fall below 1.5 times). For the nine months ended July 31, 1998 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $15.8 million and net loss was $10.6 million (including the loss on the disposal of vessels). OUTLOOK: STABLE The outlook reflects the expectation that the company will improve its financial profile in the medium to long term, Standard & Poor's said. -- CreditWire |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion