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S&P upgrades Foresight Energy following completed debt restructuring

S&PGlobal Ratings on Sept. 21 raised Foresight Energy LP's corporate credit rating to B- fromD, following the company's recently concluded out-of-court restructuring, "thatresolves all defaults associated with the sale of an to "according to the rating agency.

Concurrently,a CCC issue-level rating has been assigned to Foresight's new $349 millionsecond-lien PIK notes due August 2021 and new $300 million exchangeablesecond-lien PIK notes due October 2017.

Theissue-level rating on the company's first-lien debt, including the $475 millionrevolving credit facility due 2018 and term loan maturing in 2020, has beenraised to B from D. The first-lien debt has been assigned a recovery rating of2, indicating S&P's expectation of substantial recovery in the event of apayment default.

Also,as part of the restructuring, the $600 million in outstanding 7.875% seniornotes due 2021 was exchanged, resulting in the removal of the ratingagency's D rating.

"Therecent restructuring, including exchange of the senior notes, along withassociated amendments resolves the previous conditions of default, waivescertain amortization requirements, and restores Foresight's access to itsrevolving credit facility with revised covenants," wrote S&P.

S&Pgave Foresight a negative outlook, noting the challenges faced by the IllinoisBasin coal miner in its capital structure. "We expect leverage willcontinue to creep up, and while a significant portion is capitalized, totalinterest coverage is weak," it said.

S&P Global Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.