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TEXT-S&P may cut James River Co ratings
2012年2月29日 / 晚上8点24分 / 6 年前

TEXT-S&P may cut James River Co ratings

Overview	
    -- We expect U.S.-based James River Coal Co.'s 2012 revenues and
EBITDA 	
will likely be lower than our previous expectations due to weaker market 	
demand for thermal coal.	
    -- As a result, credit metrics will likely be weaker than we previously 	
anticipated.	
    -- We have placed our ratings, including the 'B' corporate credit rating, 	
on James River Coal Co. on CreditWatch with negative implications.	
    -- In resolving the CreditWatch listing, we will review our performance 	
expectations and James River Coal's liquidity position, and assess its 	
operating prospects to determine whether a lower rating is warranted.	
	
Rating Action	
On Feb. 29, 2012, Standard & Poor's Ratings Services placed its ratings, 	
including the 'B' corporate credit rating, on Richmond, Va.-based James River 	
Coal Co. on CreditWatch with negative implications. The CreditWatch negative 	
listing means the rating could be affirmed or lowered following the completion 	
of our review.	
	
Rationale	
The CreditWatch listing reflects our expectation that James River Coal's 2012 	
operating performance will likely be lower than we previously expected, given 	
lower demand for thermal coal. We believe that natural gas substitution and a 	
warmer-than-normal winter season is negatively affecting demand for thermal 	
coal and, as a result, James River Coal's 2012 operating performance may be 	
weaker than we had previously expected. We previously expected the company to 	
generate $175 million in EBITDA in 2012; we now think it may have difficulty 	
achieving this target. As a result, total adjusted debt to EBITDA will likely 	
rise to and remain above 5x during our forecast period, which we may consider 	
to be in line with a lower rating.	
	
The rating on James River Coal reflects our continuing assessment of the 	
company's "vulnerable" business risk profile and "aggressive" financial risk 	
profile (as our criteria define the term). We may, however, given our 	
assumptions, revise our assessment of James River Coal's financial risk 	
profile to "highly leveraged" (as defined by our criteria) following the 	
completion of our analysis. The company has significant exposure to the 	
high-cost Central Appalachia (CAPP) region and faces challenges posed by the 	
inherent risks of coal mining, including operating problems, price volatility, 	
and increasing costs and regulatory scrutiny.	
	
CreditWatch	
In resolving the CreditWatch listing, we will review our performance 	
expectations and James River Coal's liquidity position, and assess its 	
operating prospects to determine whether a lower rating is warranted. This 	
will include meeting with management to discuss near-term operating and 	
financial prospects, including end market trends. We expect to resolve the 	
CreditWatch listing within the next several weeks.	
	
Ratings List	
Ratings Affirmed; CreditWatch/Outlook Action	
                                        To                 From	
James River Coal Co.	
 Corporate Credit Rating                B/Watch Neg/--     B/Stable/--	
	
Ratings Affirmed; CreditWatch Action; Recovery Ratings Remain Unchanged	
                                        To                 From	
James River Coal Co.	
 Senior Unsecured                       CCC+/Watch Neg     CCC+ 	
  Recovery Rating                       6	
	
James River Escrow Inc.	
 Senior Unsecured                       B+/Watch Neg       B+ 	
  Recovery Rating                       2

我们的标准:汤森路透“信任原则”
0 : 0
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