Calumet Specialty Products Partners: Outlook Reduced

The outlook for oil refiner Calumet Specialty Products Partners L.P. was changed to Negative from Stable by Fitch Ratings on April 13, 2020. The company’s corporate rating, though, remained at B-. Apparently, the ratings group is worried about liquidity at the company “related to the coronavirus”.

The BDC Credit Reporter is adding the company to the Underperformers list, but not for the first time. Based on valuation, Calumet was rated CCR 3 through March 2019, but was removed as performance improved. As of 12/31/2019, the only BDC with exposure FS KKR Capital II (FSIC II) valued its $10.3mn 2023 subordinated investment at par.

Very quickly conditions have changed, as reflected in the latest change in the Fitch viewpoint. Moreover, the market value of the 2023 debt has dropped by (20%). All of that is more than enough to reinstate the company on the underperformers list with a CCR 3 rating.