S&P Places Walter Energy on CreditWatch on Withdrawal of Refinancing Plan

       By Tess Stynes 

    Standard & Poor's Ratings Services placed Walter Energy Inc.'s (WLT, WLT.T) speculative-grade ratings on CreditWatch with negative implications on the coal producer's announcement that it won't proceed with a plan to refinance a portion of its debt.

    The credit rating firm said that Walter Energy's rating--now at B or five notches below investment grade--may be affirmed or downgraded after a review of the company's cushion under its current bank agreement, its plans to address significant debt coming due in 2015 and other steps it may be considering to improve its liquidity.

    The move comes two weeks after S&P downgraded Walter Energy by a notch on expectations that the company's operating performance will be pressured in the near term by weak prices for metallurgical coal used in steelmaking, which represents the vast majority of the company's production.

    S&P noted that the cancelled transaction would pushed out $495 million of debt coming due in 2015.

    Shares were down 2.5% at $12.26 in after-hours trading. Through Thursday's close, the stock is down 65% this year.

    Write to Tess Stynes at Tess.Stynes@dowjones.com