S&P lowers Westmoreland Coal

S&P said it lowered the issuer credit rating on Westmoreland Coal Co. to CCC- from CCC and placed all of its ratings on the company on CreditWatch with negative implications.

The agency also said it lowered the rating on Oxford Mining Co. LLC's first-lien term loan to CC from CCC.

The 4 recovery rating is unchanged, indicating 30% to 50% expected default recovery.

S&P also said it lowered the rating on Westmoreland Coal's first-lien term loan and 8æ% senior secured notes to CCC- from CCC.

The 4 recovery rating is unchanged, indicating 30% to 50% expected default recovery.

The downgrades reflect a view that Westmoreland Coal could breach its fixed-charge coverage in the next three to six months, S&P said.

This would cause a cross default with its term loan and senior notes that would become immediately due, the agency said.

Westmoreland has a $321 million term loan that matures in December 2020, S&P said, and $350 million of senior secured notes due in January 2022.

Furthermore, the agency said it views Westmoreland Resource Partners LP's contemplated restructuring transaction as tantamount to default.

Westmoreland has $311.7 million term loan debt outstanding due December 2018, S&P explained.

The company's stand-alone operating performance reflects the continued decline in demand for coal-fired power generation in the United States and the competition from low-priced natural gas, the agency said.

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