S&P cuts Freeport LNG

S&P said it downgraded Freeport LNG Investments LLLP’s issuer rating to B- from B and its secured debt to B- from B+. The agency also revised the debt’s recovery rating to 3 (65%) from 2 (70%).

“We believe Freeport LNG Investment LLLP's (FLNGI) liquidity position will deteriorate and remain weak over the next 12 months following the June 8 fire at its liquefied natural gas (LNG) facility. As a result, we revised our assessment of FLNGI's liquidity to weak from adequate. We believe the company would obtain covenant waivers if needed because of the Freeport group's overall sound banking relationships,” the agency said in a press release.

The company plans to resume partial operations in October, but S&P warned the restart could be delayed because the Pipeline and Hazardous Materials Safety Administration must approve the restart.

The outlook is negative.

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