S&P trims Westmoreland Coal view to negative, lowers notes

Standard & Poor’s said it affirmed its B corporate credit rating on Westmoreland Coal Co. and revised the outlook to negative from stable.

S&P also lowered the issue-level rating on the company’s senior secured notes to B- from B and revised the recovery rating on the notes to 5 from 4, indicating an expectation for modest (10% to 30%; upper half of the range) recovery in the event of a default.

The B rating on WMLP’s issue-level term loan is unchanged. The recovery rating remains 3, indicating an expectation for meaningful (50% to 70%; upper half of the range) recovery in the event of a default.

“The negative outlook reflects weaker-than-expected liquidity as a result of a combination of exposure to a lower price environment and difficult-to-secure favorable new volume commitments,” said S&P credit analyst Vania Dimova in a news release.

“We anticipate that coal markets will remain weak through the rest of the year, and the company could be downgraded in the next 12 months if there is lower production demand and further deterioration in the market prices.”

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