S&P lowers RJO

Standard & Poor's said it lowered its long-term counterparty credit rating on RJO Holdings Corp. to B- from B.

At the same time, the agency said it lowered its debt rating on RJO's $50 million revolving credit facility to B- from BB- with a recovery rating of 4, the senior secured $385 million first-lien facility was lowered to B- from B with a recovery rating of 4 and the senior secured $150 million second-lien facility was lowered to CCC from CCC+ recovery rating of 6.

The outlook remains stable.

The agency added that the ratings actions follow changes in the proposed transaction structure, which result in an increased probability of default.

Specifically, S&P said it believes that removing the paid-in-kind toggle option on the proposed second-lien facility, coupled with higher-than-expected cash interest expense and the addition of a leverage maintenance financial covenant, result in reduced financial flexibility at RJO.

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