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Calumet Lubricants Co LP
Standard & Poors, Nov 2005
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
Abstract
Hedges on the Gulf Coast 2:1:1 crack spread should provide some stability to cash flows from fuel sales; Operating three refineries provides some asset and cash flow diversification in the specialty product business; and Fuel production is compliant with Tier II requirements, easing near-term capital-expenditure needs. Virtually all fuel production occurs at one refinery (Shreveport); A lack of a track record for fuel production at the Shreveport refinery; Small size (65,500 barrels per day) limits economies of scale; Very high debt leverage; and Recent growth of the fuels business could add volatility to earnings and cash flow, absent significant hedging at favorable crack spreads. The ratings on Calumet Lubricants Co. LP reflect its position as a small, highly leveraged, independent...
Companies mentioned in this report are: Calumet Specialty Products Partners L.P.
Action: Review
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