S&P cuts Southcross Holdings, debt

Standard & Poor's said it lowered its corporate credit and senior secured debt ratings on Southcross Holdings Borrower LP to CCC- from B-. The outlook is negative.

The recovery rating is unchanged at 4, indicating S&P’s expectation of “average” (30% to 50%; lower half of the range) recovery, if a default occurs.

At the same time, S&P revised the outlook on Southcross Energy Partners LP to negative from stable and affirmed the B- corporate credit and senior secured debt ratings on the partnership.

The 3 recovery rating on the company's senior secured term loan and revolving credit facility is unchanged, and indicates S&P’s expectation for “meaningful” (50% to 70%; upper half of the range) recovery, if a default occurs.

“The downgrade of Southcross Holdings follows Southcross Energy Partners’ announcement that it is suspending its quarterly distribution,” S&P credit analyst Mike Llanos said in a news release.

In addition, the announcement that the company is retaining an adviser to pursue potential strategic alternatives and capital structure matters increases the likelihood that the company could default or pursue a distressed debt exchange in the next few months.

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