S&P lowers Golden State

Standard & Poor's said it lowered the rating on Golden State Petroleum Transport Corp.'s $127.1 million secured term notes due in 2019 to BB+ from BBB and revised the outlook to developing from stable.

The agency also said it assigned a recovery rating of 4, indicating 30% to 50% expected recovery in a default.

The downgrade results from the project's exposure to a weak spot market environment with the Ulriken, S&P said.

The recovery rating of 4 on the secured term notes indicates 30% to 50% expected recovery in a default.

The developing outlook reflects bi-directional ratings potential over the next 12 to 18 months, S&P said.

While the strong project structure and liquidity allow the project to cover debt service for more than three years assuming no revenue, a sustained poor tanker market will materially weaken the credit profile, the agency said.

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