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S&P: U.S. Shipping Partners view negative
Standard & Poor's said it affirmed its ratings on U.S. Shipping Partners LP, including the CCC long-term corporate credit rating, and removed the ratings from CreditWatch, where they were placed with developing implications on Aug. 21.
The outlook is negative.
Recently, the lenders under the company's credit agreement waived potential financial covenant defaults from Sept. 30 to Jan. 31 and added a new cumulative EBITDA requirement through the waiver period.
The agency said that although the waiver provides covenant relief, it increases pressure on liquidity - because of higher cash interest expense requirements and related fees - at a time when liquidity is tightly constrained.
The negative outlook reflects the company's potential for a financial covenant breach despite the new covenant amendment, its tightly constrained liquidity and its deteriorating financial profile, S&P said. The agency's view is that the amendment period does not give the company sufficient time to materially improve its operating performance.
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