Fitch Affirms SEACOR Holdings' IDR at 'BBB-'; Outlook Stable

--IDR at 'BBB-';

--Senior unsecured credit facility at 'BBB-';

--Senior unsecured notes at 'BBB-';

--Convertible debentures at 'BBB-'.

The Rating Outlook is Stable.

The ratings are supported by SEACOR's historically stable credit profile, diversity of operations, and the size, diversity and quality of the company's fleet of offshore vessels. The company's conservative credit profile is further supported by management's willingness to maintain large cash and securities balances throughout industry cycles which have resulted in the company typically maintaining very low (and often negative) leverage levels as measured on a net debt basis. In addition, management has taken action in the current downturn to reduce capital expenditure levels, thereby increasing free cash flows; reduce debt balances; and halted share repurchases. Less positive factors for the rating include declining market conditions in many of the markets which SEACOR operates in, SEACOR's history of generating significant proceeds from asset sales, the potential for increased acquisition activity and increased commodity trading activity.

For the quarter ending June 30, 2009, SEACOR generated latest-12-months (LTM) EBITDA of $445.3 million and finished the period with debt of $881 million. As a result, debt-to-EBITDA is currently estimated at 1.98 times (x) and interest coverage is currently 6.98x. SEACOR generated negative $41.2 million of free cash flow (FCF) during the LTM period ending March 31, 2009, which represented a significant improvement over the past two years. Additionally, after adjusting for asset sales, FCF was positive $130.1 million for the LTM period ending March 31, 2009 which is a significant improvement over the full-year 2008 when the company continued to fund significant capital expenditures. SEACOR also curtailed all share repurchase activity during the first half of the year, and used cash flows for debt reduction ($82.6 million) and to build cash balances ($93.6 million).

Fitch expects SEACOR to generate positive free cash flow in 2009 stemming from the significantly reduced capital expenditures which should allow the company to repay debt maturities without significantly drawing down cash balances or increasing revolver borrowings. Rising debt levels (given the current asset base) or significant share repurchases would be a catalyst for negative rating action.

SEACOR maintains liquidity from cash and equivalents ($749.4 million at June 30, 2009 which is composed of $415.6 million of cash and equivalents, $20.8 million of restricted cash, $47.3 million of marketable securities and $265.6 million of Title XI Reserve Funds), its $450 million credit facility due November 2013 ($127.1 million of borrowings and letters of credit outstanding on the facility at June 30, 2009) and operating cash flows. The company's next maturity is on Sept. 15, 2009 when the remaining 7.2% senior notes mature (estimated amount outstanding of $32.8 million). The next maturities do not occur until 2012 and 2013 when the company's remaining unsecured notes mature. SEACOR's 2.875% convertible debentures due 2024 become putable by noteholders on Dec. 15, 2011 at par.

Key covenants are primarily associated with the company's senior unsecured credit facility and include minimum interest coverage (3.0x covenant level), maximum secured debt to total capitalization (25% covenant level) and maximum funded debt to total capitalization (50% covenant level). SEACOR currently maintains a sizable cushion to covenant levels which would allow the company's EBITDA levels to fall by an estimated 69% before the interest coverage covenant would be exceeded.

SEACOR is a diversified, global company that owns, operates, invests in and markets equipment, primarily in the offshore oil and gas and marine transportation industries. The company operates in six business segments including offshore marine services, marine transportation services, inland river services, aviation services, environmental services, and commodity trading. Additionally, the company has harbor and offshore towing services, asset leasing activities and other joint ventures and equity investments. SEACOR's corporate headquarters are located in Fort Lauderdale, Florida.Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

SOURCE: Fitch Ratings

Fitch Ratings 
Adam M. Miller, 312-368-3113 (Chicago) 
Sean Sexton, CFA, 312-368-3130 (Chicago) 
Media Relations: Cindy Stoller, 212-908-0526 (New York) 
cindy.stoller@fitchratings.com