Moody's: Oxbow outlook positive

Moody's Investors Services said it changed Oxbow Carbon LLC's outlook to positive from stable and affirmed the company's corporate family rating, probability-of-default rating, $350 million secured revolving credit agreement and $674 million secured term loan B at B1.

The agency said the positive outlook reflects its expectation that Oxbow will continue to evidence good earnings and cash generation performance over the next 12 to 15 months and incorporates the progress the company has made in reducing debt levels and Moody's expectation that further debt reduction will be accomplished in 2010 from free cash flow generation.

The B1 corporate family rating reflects the volatility inherent in the fuel-grade petcoke, CPC and aluminum markets and the operational risks inherent to Oxbow's single coal mining site in Colorado, the agency said.

However, Moody's said Oxbow exhibits relatively stable operating margins given the operating construct of earnings being on a net spread basis.

Leverage was about 2.2 times on a last-12-months basis to Sept. 30.

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