Reuters: Bankruptcy News: TEXT-S&P cuts Patriot Coal rating to 'D'

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TEXT-S&P cuts Patriot Coal rating to 'D' Jul 10th 2012, 18:31 Tweet Share this Email Print Related Topics Stocks » Bonds News » Bonds » Markets » Bankruptcy » Energy » Tue Jul 10, 2012 2:31pm EDT July 10 - Standard & Poor's Ratings Services lowered its corporate credit rating on St. Louis, Mo.-based Patriot Coal Corp. (Patriot) to 'D' from 'CCC'. At the same time, we lowered our issue rating on the company's senior unsecured debt to 'D' from 'CCC'. We removed the ratings from CreditWatch, where we placed them with negative implications on Jan. 23, 2012. Rationale The 'D' rating on Patriot follows the company's filing of a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code to implement its restructuring plan. During recent months, the cancellation of customer contracts, lower thermal coal prices, and rising expenditures for environmental and other liabilities have severely constrained the company's liquidity and financial flexibility. However, Patriot expects its mining operations and customer shipments to continue in the ordinary course of business throughout the reorganization process and has obtained a commitment for $802 million in debtor-in-possession financing. Upon the Bankruptcy Court's approval, the company will use the new financing and cash generated from Patriot's ongoing operations to support the business during the reorganization process. Related Criteria And Research -- Credit FAQ: U.S. Coal Producers Face Substantial Headwinds, Including High Inventories And Low Natural Gas Prices, June 6, 2012 -- Recovery Report: Patriot Coal Corp.'s Recovery Rating Profile, May 23, 2012 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 Ratings List Downgraded; Removed From CreditWatch To From Patriot Coal Corp. Corporate Credit Rating D/--/-- CCC/Watch Neg/-- Senior Unsecured D CCC/Watch Neg Recovery Rating 3 3 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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