Pegasus Shipping Mulls Bond Restructuring

Panamax tanker specialist Pegasus Shipping is reportedly discussing restructuring its $150 million 1997 junk bond issue with noteholders. Officials said the company is using a 30-day grace period in relation to a coupon payment that was due on Nov. 15. Discussions also included proposals to capitalize on current market sector weakness and the introduction of new capital, officials said. Last week ratings agency Moody's downgraded Pegasus' senior secured debt rating on the company's 11.875 percent first preferred ship mortgage notes due 2004 to Ca from B3 on fears of a payment default. Company officials said that competitive conditions in the Panamax tanker markets exerted pressure on rates, and the company had been hit by the default of a major charterer representing more than 20 percent of its income.