Moody's may cut Teekay ratings

Moody's Investors Service said it placed the ratings (Ba1 senior implied) of Teekay Shipping Corp. under review for possible downgrade following the announcement by the company of its proposed purchase of Naviera F. Tapias SA for about $810 million.

The company plans to finance the acquisition through both the use of debt (both existing Tapias debt as well as additional borrowings at Teekay) and cash. Debt to be assumed in this transaction will be non-recourse to Teekay Shipping Corp.

Affected ratings include Teekay's $64.3 million 8.32% senior secured notes due 2008, rated Ba1; $393 million guaranteed senior secured revolving credit facilities due 2006 and 2008, rated Ba1; $31.6 million guaranteed senior secured term loan due 2005, rated Ba1; $350 million 8.875% senior unsecured notes due 2011, rated Ba2.

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