S&P cuts Alpha Natural, debt

Standard & Poor's said it lowered its corporate credit rating on Alpha Natural Resources Inc. to CCC+ from B.

The outlook is negative.

The recovery ratings on the company's debt remain unchanged, but the agency lowered the issue-level ratings on the debt in line with its notching guidelines. The issue-level ratings on the company's first-lien debt were lowered to B from BB- with a 1 recovery rating, indicating an expectation of very high (90% to 100%) recovery in the event of a payment default.

At the same time, S&P lowered its issue-level ratings on the second-lien debt to B from BB- with a 2 recovery rating, indicating an expectation of substantial (70% to 90%; lower half of the range) recovery in the event of a payment default.

Finally, the agency downgraded its issue-level ratings on the senior unsecured debt to CCC- from CCC+ with a 6 recovery rating, indicating an expectation of negligible (0% to 10%) recovery in the event of a payment default.

"The negative outlook reflects our view that coal prices will remain depressed for at least another year," S&P credit analyst Chiza Vitta said in a news release.

"Potential asset sales or capital restructuring notwithstanding, we expect liquidity will continue to deteriorate because principal uses of liquidity remain above $300 million with limited sources of liquidity. Nevertheless, we expect cash and investments on the balance sheet could support the adequate liquidity assessment into 2017."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.