S&P revises Fairmont loan recovery

Standard & Poor’s said it affirmed the BB- corporate credit rating on Fairmount Santrol Inc.

The agency also said it revised the recovery rating on Fairmount’s senior secured credit facilities to 4 from 3. A recovery rating of 4 reflects 30% to 50% expected default recovery.

The rating on the senior secured debt remains at BB-, which is in line with the corporate credit rating.

The revised recovery rating incorporates an increase in Fairmont’s revolving credit facility to $125 million from $75 million, S&P said.

The outlook is stable.

Despite falling oil and gas prices and weakening demand in Fairmount’s end markets, the agency said it affirmed the corporate credit rating.

Although the extent to which volumes and prices will be affected through the end of the year is uncertain, Fairmount has a strong enough financial-risk profile to warrant the affirmation, S&P said.

The stable outlook reflects a view that Fairmount will maintain leverage at less than 5x over the next 12 months with adequate liquidity, the agency added.

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