S&P downgrades Dixie

Standard & Poor's said it lowered the corporate credit rating on FR Dixie Acquisition Corp. to B- from B.

The agency also said it lowered the ratings on the company's $40 million revolving credit facility due 2018 and $280 million term loan B due 2020 to B- from B.

The recovery rating remains at 3, indicating 50% to 70% expected default recovery.

The outlook is negative.

The downgrades reflect a view that low oil prices have negatively affected Dixie's operating performance by more than previously expected, causing the company's adjusted debt-to-EBITDA ratio to increase significantly above 5x, S&P said.

The low oil prices have caused a sharp reduction in new capital projects by Dixie's upstream oil and gas customers, the agency said.

The decline in rigs and reduced spending by these customers has led us to revise downward an expectation for company revenues in the year ahead, S&P said.

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