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) was gaining 1.3%, Excel Maritime ( EXM) was rising 3%, and DryShips ( DRYS) was higher by 0.8%.

-- Written by Scott Eden in New York

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