S&P revises Fairmount Santrol to stable

S&P said it revised the outlook on Fairmount Santrol Inc. to stable from negative and affirmed its B- corporate credit rating.

The agency also affirmed the B- issue-level rating on the company's senior secured debt. The recovery rating remains 3, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default.

"The stable outlook reflects our view that the frac sand industry is on the path to recovery given increased oil prices and drilling activity," S&P credit analyst Patricia Mendonca said in a news release.

"As such, we expect Fairmount's operating and financial performance to improve but still remain highly leveraged over the next 12 months, specifically, debt to EBITDA in the 6x-7x range and FFO to debt in the 9%-12% range in 2017."

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