S&P lowers United Refining outlook to negative

Standard & Poor's said it cut its outlook on United Refining Co. B corporate credit rating to negative from stable.

The agency said that the outlook revision reflects its expectation of weak financial performance and credit metrics for 2009 and possibly beyond.

Interest expense coverage is likely to remain weak at 2x or lower, and adjusted debt leverage could continue to exceed 7x, the agency said, noting that adequate liquidity provided primarily by its $130 million credit facility, which was near full availability as of Jan. 12 supports the ratings.

The agency said that liquidity concerns and its expectations that industry conditions could remain weak for 2009 and possibly beyond were key factors behind the rating actions, adding that it expects margins to remain thin and product demand weak.

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