S&P drops Koosharem

Standard & Poor's said it lowered its corporate credit rating on Koosharem Corp. to B- from B and removed the ratings from Creditwatch, where they were placed with negative implications on June 17.

The outlook is stable.

In addition, the agency said it lowered the issue-level ratings on Koosharem's $509 million senior secured credit facilities while it lowered the bank loan rating on the $409 million first-lien credit facility to B- from B+ and revised the recovery rating on that debt to 3 from 2.

The agency added that it also lowered the issue-level rating on the company's $100 million second-lien term loan B due 2014 to CCC from CCC+ while the second-lien recovery rating remains at 6.

"The downgrade reflects the recession's effect on the company's operating performance," said S&P credit analyst Hal F. Diamond, "along with its high debt leverage and its narrow margin of compliance with its total leverage covenant under the first-lien credit agreement."

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