Standard & Poor’s Rating Services announced on Thursday that it has lowered its corporate credit rating on Walter Energy (WLT
) from B to B-.
The rating on the existing senior secured debt was also lowered from B+ to B, while the senior unsecured debt was downgraded from B- to CCC+. According to the ratings firm, the downgrade and negative outlook reflects its expectations that Walter Energy’s leverage will rise to more than 10x in 2013, and that it will likely continue to be above 5x in 2014. Walter Energy has also suffered from a significant decline in coal prices, as well as weaker demand in Europe and China.
Despite the downgrade, Walter Energy shares rallied 5.8% during Thursday’s session. Year-to-date, the stock is down 63.70%.
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