NEW YORK (AP) â¿¿ Shares of James River Coal slid 3 percent before Tuesday's opening bell after a trim to its credit rating from Standard & Poor's pushed the miner further into non-investment grade territory. Late Monday, S&P lowered the rating for the Richmond, Va., company to "CCC+" from "B-." James River's ratings have been under review for a possible downgrade since February. The ratings service also lowered its issue rating on the James River's $275 million senior unsecured notes to "B-" from "B." The recovery rating remains "2," which means S&P thinks that investors have a 70 percent to 90 percent chance of recovery in the event of a default. Natural gas prices have plunged to 10-year lows this year and it has become increasingly favored by utilities that use coal or natural gas to generate electricity. Utilities are also preparing for stricter emission standards, driving down coal demand and forcing miners to dramatically scale back production. "The downgrade reflects our assessment that market demand for coal has deteriorated such that we expect James River Coal's performance will likely be materially lower than we previously expected," said S&P analyst Megan Johnston of Standard & Poor's Ratings Services. Coal markets will be weak through 2013, Johnston said, which will likely cause the company's liquidity to deteriorate. Last week, Arch Coal Inc. of St. Louis announced plans to close three mining complexes, temporarily idle another, and lay off about 750 workers. Arch said the reductions would trim its thermal coal production by more than 3 million tons annually. Shares of James River Coal Co. fell 10 cents to $2.82 in premarket trading.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Stocks
Micron Bears Have Some Serious Soul Searching to Do Now
The chipmaker's shares may well have priced in the absolute worst in earnings outlook already.
Boeing Could Face SEC Probe Into 737 MAX Groundings: Report
Amid probes by SEC and FAA, 737 MAX planes' return to service likely delayed, reports say.
S&P 500 Support Holds, but a Third Test Would Likely Be a Different Story
While the bears have been unsuccessful so far in breaking support, the bulls have been equally lackluster in generating upside momentum.
Dow Ends Modestly Higher; Stocks Edge Up Ahead of Holiday Weekend
Stocks ended higher Friday as Wall Street heads into a long Memorial Day weekend.
2 Tailwinds Could See Investors Shop for Retail Stocks in 2019 -- ICYMI
Wage expenses and freight costs could soon abate, a big tailwind for retailers heading into the rest of 2019. Here's what investors need to know.