Moody's Investors Service downgraded
to C from Caa1 the rating for senior notes of Enterprises Shipholding Corporation
. The downgrade reflects the company's announcement to consider a restructuring of debt and the intention not to pay interest on the senior notes which is due in May 2001. The senior implied rating has also been downgraded to C from Caa1, the issuer rating has been lowered to C from Caa2. The company's failure to meet interest payment in Moody's view constitutes a default on the company's debt.
The company appointed a financial advisor to assess the restructuring alternatives for Enterprises. The C rating for the senior notes reflects Moody's view that a potential restructuring of the outstanding debt will likely involve significant losses for noteholders due to the illiquid asset structure, high debt levels and the secured nature of a $38 million credit facility.
Enterprises said that it will continue to meet obligations under the credit facility. Moody's will monitor the company's discussions with noteholders with respect to the level of debt recovery to be expected and closely watch potential debt restructuring negotiations.
Enterprises Shipholding Corporation, headquartered in Athens, Greece, is one of the leading independent owners and operators of refrigerated cargo vessels. The company has a long-standing presence in the industry and a diversified customer base.