On Credit Watch: PanOceanic Bulk Carriers Ltd.

Credit News From Standard & Poor’s

Date: 29/5/1998 – Standard & Poor’s today placed its single- ‘B’ corporate credit and senior unsecured ratings of PanOceanic Bulk Carriers Ltd. (PanOceanic Bulk) on Credit Watch with negative implications.

The Credit Watch listing reflects the possibility that the company may have to use its credit facility ($5 million as yet undrawn), together with the remaining net proceeds of the Note Offering from December 1997 available cash to meet its interest payment on June 15, 1998. The company is highly leveraged, with net debt to capital at 85% at the end of March 1998, and interest payments on the $100 million per year. The company had approximately $17 million in the Escrow Account at the end of March 1998; this can be used only to meet interest payments provided that, among other conditions, the company loan to value ratio, after giving effect to such payments, does not exceed 0.85 to 1.0.

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