S&P: Patriot Coal cut to B, still on watch

Standard & Poor's said it lowered its corporate credit rating on Patriot Coal Corp. to B from B+. At the same time, the agency said it lowered the issue-level rating on the company's senior unsecured debt to B from B+. The recovery rating remains 3.

The ratings remain on CreditWatch with negative implications.

"The CreditWatch listing reflects our expectation that Patriot's 2012 operating performance will likely be lower than we previously expected given lower demand for thermal coal," said S&P credit analyst Maurice Austin in a news release. "We believe that natural gas substitution and a warmer-than-normal winter season is negatively affecting demand for thermal coal and, as a result, on Patriot's thermal coal production."

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