S&P downgrades Horsehead

Standard & Poor’s said it downgraded Horsehead Holding Corp. to CCC from B-.

The agency said it lowered the rating on the company’s senior secured notes to CCC from B-. The 4 recovery rating on the debt is unchanged, indicating 30% to 50% expected default recovery.

The outlook is negative.

The downgrades reflect a view of Horsehead’s deteriorating operating performance, weakening liquidity position and unsustainable leverage, S&P said.

The agency said it expects that low zinc- and nickel-prices to persist into 2016 given expectations of limited near-term upside for zinc and moderately oversupplied global market for nickel.

Additionally, S&P said it expects the production levels at Horsehead’s new Mooresboro facility will remain constrained as the project continues to be stymied by operational issues.

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