Moody's lowers U.S. Shipping Partners

In a corrected rating, Moody's Investors Service said it lowered U.S. Shipping Partners LP's corporate family and probability-of-default ratings to Caa1 from B2, senior secured bank credit facility to B3 (LGD3, 38%) from B1 (LGD3, 37%) and senior secured second-lien bonds to Caa3 from Caa1. The loss-given-default assessment assigned to the bonds remains LGD5 (89%).

The outlook is stable.

The agency said the ratings were downgraded because Moody's expects further deterioration in U.S. Shipping Partners' credit metrics as debt increases at USS Products Investor LLC. In addition, funds from operations are likely to be further stressed over the near term because a majority of U.S. Shipping Partners' integrated tug-barge vessels could trade in the spot market, which could result in time charter equivalent rates below recently contracted levels and reduced use of the integrated tug-barge fleet.

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