S&P lowers Xinergy

Standard & Poor's said it lowered the corporate credit rating on Xinergy Corp. to CCC from CCC+, along with the rating on its senior secured notes to CCC- from CCC.

The 5 recovery rating indicates 10% to 30% expected default recovery.

All ratings remain on CreditWatch, where they were placed with negative implications in October 2012.

The downgrade reflects a view that the company faces the rising potential for a liquidity shortfall over the next year, given the expectation for negative funds from operation in 2013 and capital expenditures relating to the build out of its newer West Virginia metallurgical coal mine, S&P said.

The agency said it believes that anemic demand for thermal coal will continue over the next several quarters and near-term conditions in the domestic met coal market will remain unfavorable due to weakness in the global steel industry.

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