S&P rates Fairmount loan BB-

Standard & Poor's said it assigned a BB- rating and 4 recovery rating to Fairmount Minerals Ltd.'s proposed $1.075 billion senior secured credit facility.

The 4 recovery rating indicates 30% to 50% expected recovery in a default.

The facility is expected to consist of a $75 million senior secured revolving credit facility due 2015 and a $1 billion senior secured term loan due 2017.

The proceeds will be used to refinance existing debt and fund a dividend to shareholders, S&P said.

The ratings on the company's existing bank credit facility will be withdrawn once the proposed transaction is completed.

S&P also said it affirmed the company's BB- corporate credit rating.

The outlook is stable.

The ratings reflect a view that solid natural gas shale drilling activity will support Fairmount's improving operating performance and credit metrics in the near term, the agency said.

The ratings also consider its modest size and scope, exposure to cyclical end markets and significant customer concentration, S&P said.

© 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.