Griffin Coal downgraded by S&P

Standard & Poor's Ratings Services has lowered its rating on Rick Stowe's private comany Griffin Coal Mining Company Pty Ltd after the coal miner's financial results were below expectations.

Below is the announcement from Standard & Poor's:

Standard & Poor's Ratings Services today said that it had lowered its ratings on The Griffin Coal Mining Company Pty Ltd. (Griffin) to 'B+', from 'BB-', and placed the ratings on CreditWatch with negative implications. The rating actions follow the release of Griffin's fiscal 2008 financial results, which were below our expectations.

"EBITDA interest cover for fiscal 2008 was significantly below expectations for the 'BB-' rating," Standard & Poor's credit analyst Brenda Wardlaw said.

"While this was partly due to adverse weather conditions, which affected operating costs, management fees to related parties also remained high. We also note that Griffin's earnings are significantly exposed to interest income from related parties."

Resolution of the CreditWatch will follow a detailed review of the likely pace of improvement in Griffin's financial profile, both from its operating performance and from the inter-relationships with related parties, including management fees and income from related party loans. However, we expect the rating to remain in the 'B' category.