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S&P upgrades Natural Resource Partners
S&P said it raised the corporate credit rating on Natural Resource Partners LP to B- from CCC+ and removed the rating from CreditWatch, where it was placed with positive implications in March.
The outlook is positive.
S&P also said it assigned a B- rating to the partnership's new $346 million senior unsecured notes co-issued by NRP Finance Corp.
The recovery rating on the notes is 4, indicating 30% to 50% expected default recovery.
S&P also said it raised the rating on Natural Resource Partner's existing $425 million senior unsecured notes to B- from CCC- and removed the ratings from CreditWatch, where they were placed with positive implications in March.
The agency also said it revised the recovery rating to 4 from 6, indicating 30% to 50% expected default recovery.
The upgrades are based on the company’s successfully completing this transaction thereby avoiding a liquidity shortfall, S&P said.
The transaction also resolved a number of primary concerns, including upcoming maturities consisting of $425 million of unsecured notes due in October 2018 and $210 million outstanding under the old $300 revolving credit facility due in June 2018, the agency said.
The transaction reduces maturities over the next 18 months to $94 million to be repaid October 2017, with full availability under a downsized $180 million revolving credit facility, which steps down to $150 million by Dec. 31, 2017 and to $100 million by Dec. 31, 2018, S&P added.
The company's operating performance also is expected to improve, driven by increasing cash flows from the coal royalties segment due to the elevated international metallurgical coal prices and modest domestic volume recovery in the Illinois Basin, the agency said.
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