Standard & Poor’s Ratings Services on Monday increased its ratings on the noninvestment-grade corporate credit of Orlando, Fla.-based Walter Industries Inc., a coal producer.
The agency raised its rating to “BB-” from “B+”. S&P also boosted its ratings on four other coal companies.
“The upgrade reflects the strengthening of the company’s credit metrics,” said Standard & Poor’s credit analyst Sherwin Brandford. “The combination of continued good operating performance and material debt reduction following its recent equity offering brought the credit metrics to a level we consider to be more in line with a higher rating.”
The agency also said that, given the “current positive operating momentum in the coal industry,” it expects further improvement to the company’s financial profile during the next several quarters.
In afternoon trading, shares of Walter Industries fell $12.25, or 17.2 percent, to $59.99, amid the broad market sell-off.
Recent reports that global investment bank the Lehman Brothers has had to file for bankruptcy has led one sector commentator to speculate that the credit crunch is not yet over.
In news that may be of interest to people seeking unsecured loans, Michael Baxter, an economist at Defaqto, said that financial services providers would now be “even more reluctant” to start lending to each other following the revelation of the Lehman Brothers’ collapse.
He said that the developments pointed towards the fact that the current economic squeeze was not yet halfway through or nearing its end.
However, Mr Baxter noted: “It is possible to over-emphasise the significance that the failure of this bank will have - it is more an illustration of the times rather than a sign that massive problems are going to come from this collapse.”
Those searching for unsecured loans may also be interested to hear that the US Federal Reserve has broadened its emergency lending scheme and the UK and European central banks have injected a total of about $50 billion (£28 billion) into the financial system.
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