S&P lowers USEC

Standard & Poor's said it lowered USEC Inc.'s corporate credit rating to CCC from CCC+.

The outlook is negative.

S&P also lowered the rating on the senior convertible notes due October 2014 to CC from CCC-.

The recovery rating remains 6, indicating 0% to 10% expected recovery in a default.

All of the ratings were removed from CreditWatch, where they were placed with negative implications in May to reflect a continued uncertainty regarding whether USEC can secure the second phase of funding for a research, development and demonstration program prior to a conditional commitment for a loan guarantee, S&P said.

The downgrade reflects an assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah gaseous diffusion plant after a one-year multiparty agreement to extend operations expires in May 2013, the agency said.

This reflects the near-term supply and demand imbalance related to the 2011 earthquake and tsunami that severely damaged four nuclear reactors in Fukushima, Japan.

The company also said it may pursue discussions with certain creditors and key stakeholders regarding ways to improve its capital structure, including the potential restructuring of its balance sheet, S&P said.

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