Tanker ratings hit

A Cantor Fitzgerald analyst issued downgrades Thursday across the spectrum of US-listed tanker stocks.

Natasha Boyden, who follows shipping shares for the New York investment bank, blamed rates tanker rates that have "weakened considerably" as the thirst for chartering VLCCs as floating storage died down.

Herbjorn Hansson's Nordic American Tankers was downgraded to "sell."

The demand slump and the raft of newbuilding deliveries through 2010 "could put severe pressure on tanker rates over the near-term as simply too many ships chase too few cargoes," the analyst said.

Worst hit by the downgrades was New York-listed Nordic American Tanker Shipping, which Boyden cut from "hold" to "sell".

The analyst cut also downgraded Overseas Shipholding Group (OSG), General Maritime, Omega Navigation Enterprises and DHT Maritime from "buy" to "hold.

The downgrades come as US-listed owners are set to begin reporting first-quarter earnings.

Boyden pointed to continued drift of tanker rates during the period average VLCC spot rates sinking by 21% since the fourth-quarter and by 40% since the first quarter of 2008.

The analyst says she sees further downside for tanker rates late this year, as VLCCs currently being used for storage reenter the spot trade.

Tsakos Energy Navigation was spared the ratings knife, keeping its "buy" rating.

"Companies with seasoned management teams, a diverse and modern fleet, high charter coverage and a strong balance sheet will be positioned best to withstand the downturn in the market," Boyden said.

The downgraded tanker stocks were trading lower Thursday on a mixed morning for shipping shares.

Omega Navigation's Nasdaq-listed shares had fallen by 7.5% to $3.80 in late-morning trading, while General Maritime had slipped by 5.9% to $9.21.

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