S&P lowers Oxbow Carbon

Standard & Poor’s said it lowered its corporate credit rating on Oxbow Carbon LLC to BB- from BB. The outlook is stable.

At the same time, in conjunction with the downgrade of the corporate credit rating, S&P lowered the ratings on the company’s senior secured $800 million first-lien revolving credit facility, $300 million term loan A, and $350 million term loan B to BB from BB+. The recovery rating on these debt obligations remains 2, indicating an expectation of substantial recovery (70% to 90%) in the event of a payment default.

S&P also lowered the ratings on the company’s $350 million senior secured second-lien term loan B to B+ from BB-. The recovery rating on this debt remains 5, indicating an expectation of modest recovery (10% to 30%) in the event of a payment default.

“The downgrade reflects our view that the company’s debt leverage will be between 4x to 5x and funds from operations [FFO] to debt will be slightly under 15% in 2014, consistent with an ‘aggressive’ financial risk profile as per our criteria versus our previous ‘significant’ financial risk assessment,” said S&P credit analyst William Ferara in a news release.

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