S&P trims Optima view, rates notes CCC+

Standard & Poor’s said it revised its outlook on Optima Specialty Steel Inc. to negative from stable and affirmed the B corporate credit rating on the company.

S&P also raised the issue-level rating on the company’s 12˝% senior secured notes to B+ from B. The recovery rating on the senior secured debt is 2, indicating an expectation for substantial (70% to 90%; upper half of range) recovery in the event of payment default.

In addition, S&P assigned a CCC+ issue-level rating to the company’s 12% senior unsecured notes, and the recovery rating on those notes is 6, indicating an expectation for negligible (0% to 10%) recovery in the event of payment default.

S&P said the negative outlook reflects its view that liquidity may become less than adequate during the next six months should the ABL revolving credit facility become current in October 2015 and the company not have a viable plan for extension.

“We could lower the rating to B- if the ABL becomes current in October 2015 and Optima does not have a firm plan to refinance; we could further lower the rating to CCC+ if the company is not able to refinance the December 2016 maturity debt by December 2015,” S&P said in a news release.

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