S&P: Calumet view to negative

Standard & Poor’s said it revised the outlook on Calumet Specialty Products Partners LP to negative from stable.

The agency also said it affirmed the B+ corporate credit rating on Calumet and B+ issue-level rating on its senior unsecured notes.

S&P also said it kept the 4 recovery rating on the notes, indicating 30% to 50% expected default rating.

The outlook revision reflects a view that Calumet’s financial measures will be worse than previously anticipated mainly due to narrowing refining margins and extended downtime at its Shreveport refinery, the agency said.

S&P said it anticipates the company’s debt-to-EBITDA ratio to exceed 6x in 2014 and be close to the downgrade trigger of 4.5x in 2015.

The agency also said it also forecasts the partnership to generate a very weak distribution coverage ratio of 0.5x in 2014, therefore requiring the company to finance the shortfall with debt.

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