NEW YORK (TheStreet) -- Shares of Eagle Bulk Shipping (EGLE) - Get Report, which lost more than 11% of its value during the previous session after one of its biggest charterers declared bankruptcy, received a timely upgrade on Wednesday.

FBR Capital Markets

moved the stock to outperform from market perform, saying the

selloff in Eagle Bulk shares

triggered by the receivership of

Korea Lines Corp.

, which came to light Tuesday morning, were "overdone."

>>Amid Glut, Where Will Dry Bulk Rates Go?

Eagle Bulk had hired out about a dozen of its ships under long-term charter contracts to the troubled KLC. Eagle has a fleet of 48 vessels.

In a note to clients Wednesday morning, the firm said it conducted channel checks on Eagle's charters with KLC. Those checks showed that Eagle chartered its ships to KLC at rates below $20,000 a day, according to FBR. "Thus we do not expect Eagle to experience a material negative impact," the research note read.

But according to the calculations of one hedge-fund trader who focuses on shipping stocks, Eagle Bulk has about $700 million in exposure to KLC. Investors also worried that KLC's receivership could put Eagle's loan covenants in jeopardy.

The company hasn't put a dollar figure on its counterparty risk with KLC, but said in a press statement Tuesday that its exposure was "modest."

In its note, FBR also said Eagle stands to benefit because its fleet is composed mainly of smaller dry-cargo vessels, rates for which will outperform the larger capesize ships this year, in FBR's view.

Dry-bulk shares were up modestly Wednesday after a vicious, broad-based selloff a day earlier, as the KLC news coupled with a downgrade by Deutsche Bank served to deflate investor interest in a sector already beset by

collapsing rates for its dry-cargo freight services

.

Midday Wednesday, Eagle shares were rising 1.5% to $4.07.

Among other big losers from the previous session,

Genco Shipping & Trading

(GNK) - Get Report

was up 1.2%,

Navios Maritime Holdings

(NM) - Get Report

was gaining 1.3%,

Excel Maritime

(EXM)

was rising 3%, and

DryShips

(DRYS) - Get Report

was higher by 0.8%.

-- Written by Scott Eden in New York

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