S&P downgrades Foresight, loans, notes

Standard & Poor's said it lowered its corporate credit rating on Foresight Energy LP to CCC from B+ and placed the rating on CreditWatch with developing implications.

The agency also lowered its issue-level rating on the partnership's first-lien debt to B- from BB. The recovery rating is unchanged at 1, indicating an expectation of very high recovery (90% to 100%) in the event of a payment default.

In addition, S&P lowered its issue-level rating on the company's senior unsecured notes to CCC from B+. The recovery rating is unchanged at 3, indicating an expectation of meaningful recovery (50% to 70%; lower half of the range) in the event of a payment default.

All issue-level ratings were placed on CreditWatch with developing implications, in line with the issuer credit rating.

"We are lowering our corporate credit rating on Foresight to CCC in accordance with our criteria. We typically reserve CCC ratings for cases where specific default scenarios are envisioned within a year," S&P credit analyst Chiza Vitta said in a news release.

"The rating further reflects our view that the change in control provisions in Foresight's debt, along with the recent ruling, make it likely that the issuer will default without an unforeseen positive development."

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