S&P downgrades Boart Longyear

Standard & Poor's said it lowered the corporate credit rating on Boart Longyear Ltd. to CCC+ from B.

S&P also said it lowered the ratings on subsidiary Boart Longyear Management Pty Ltd.'s secured notes to B from BB- and its senior unsecured notes to CCC+ from B.

The 1 recovery rating on the secured notes indicates 90% to 100% expected default recovery and the 4 recovery rating on the unsecured notes indicates 30% to 50% expected default recovery.

The downgrade follows a year in which Boart Longyear's adjusted EBITDA dropped by nearly two-thirds because demand for its drilling services and products plummeted as global mining companies cut exploration and mining capital spending, said James Fielding, an S&P analyst.

"We expect these adverse conditions to continue in 2014 and for the company's leverage to possibly approach 10x, a level that we view to be unsustainable," Fielding said in a press release.

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