Moody’s lowers Hi-Crush, loan to B3

Moody's Investors Service said it downgraded Hi-Crush Partners LP's corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and senior secured term loan due 2021 to B3 from B2.

The speculative grade liquidity rating was affirmed at SGL-3.

The outlook was revised to negative from stable.

Moody’s said the downgrade and negative outlook reflect its expectation that EBITDA and key credit metrics will deteriorate further in 2016, stemming from ongoing weakness in the oil and natural gas industry. The rapid deterioration in Hi-Crush's end markets has resulted in a 31% decline in adjusted EBITDA for trailing-12 months ending Sept. 30 as compared to year-end 2014.

Key credit metrics have also weakened. Adjusted debt-to-EBITDA increased to 2.7 times from 1.7 times and adjusted EBIT-to-interest coverage declined to 5.5 times from 9.5 times for the same period.

Although operating margin remains solid, it also declined to 24.3% from 35.9%, the agency said.

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