S&P revises Fort Dearborn view to negative

S&P said it affirmed its ratings on Fort Dearborn Holding Co. Inc., including its B- issuer credit rating, and revised the outlook to negative from stable.

At the same time, S&P affirmed the B- issue-level rating on the company's first-lien bank facility, with a 3 recovery rating, indicating an expectation of meaningful (50%-70%; rounded estimate: 55%) recovery for lenders in the event of a payment default.

S&P also affirmed a CCC issue-level rating on the second-lien bank facility, with a 6 recovery rating, indicating an expectation of negligible (0%-10%; rounded estimate: 0%) in the event of default.

“The outlook revision reflects our view of a one-in-three chance of a downgrade over the next year given the company's very high debt leverage, as Fort Dearborn's earnings this year have become pressured from operational difficulties,” S&P said in a news release.

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