S&P rates Suncoke notes BB

S&P said it assigned BB issue-level and 2 recovery ratings to SunCoke Energy Inc.'s planned $500 million of senior secured notes due 2029 and cut the revolver’s rating to BB from BB+. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 85%) recovery in default. The notes have first-lien priority over the issuer and the guarantors' assets and are pari passu with the revolving credit facility.

“Consequently, we lowered our issue-level rating on the existing $400 million revolving credit facility (which the company is proposing to downsize to $350 million) to BB from BB+ and revised the recovery rating to 2 from 1. The maturity on the revolver will be extended to 2026 from 2024,” S&P said in a press release.

SunCoke is refinancing its senior unsecured notes and downsizing the revolver commitment to reduce fees and cash interest expense and extend its debt maturity profile, the agency said.

The company plans to use proceeds and revolver drawings to repay its $587 million of 7½% senior unsecured notes.

SunCoke Energy’s other ratings are unchanged, the agency said.

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