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"Walter Energy Inc. has exchanged $25 million of its 9.875% senior unsecured notes due 2020 for 2.25 million shares of its common stock, which we deem a distressed exchange under our criteria.
We are lowering our corporate credit rating to 'SD' (selective default) from 'CCC+'. At the same time, we are lowering our issue-level ratings on the affected senior unsecured notes to 'D' from 'CCC-'.
We plan on reinstating the 'CCC+' corporate credit rating and negative outlook over the next couple of days, which in our view capture Walter's business and financial risks.
We will shortly reinstate the 'CCC+' corporate credit rating and negative outlook, which in our view capture Walter's business and financial risks. We view the small size of the debt exchange to have a minimal effect on the company's capital structure, which we consider to be unsustainable absent a material improvement in metallurgical coal markets."
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