S&P lowers Eletson notes

S&P said it affirmed its CCC+ long-term corporate credit rating on Eletson Holdings Inc. and removed the rating from CreditWatch where it was placed with developing implications on April 12.

The outlook is negative.

At the same time, the agency lowered the issue rating on Eletson's $300 million first-preferred ship mortgage notes to CCC+ from B-. The recovery rating is 3, reflecting an expectation of meaningful (50%-70%, rounded estimate: 55%) recovery in the event of a default.

S&P said that despite the completed refinancing of its syndicate bank facility in September, Eletson faces a significant decrease in product tanker and liquefied petroleum gas rates, constraining the company's ability to generate cash and keeping liquidity under pressure.

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