S&P rates Arch Coal notes BB

Standard & Poor's said it assigned BB issue and 4 recovery ratings to Arch Coal Inc.'s proposed $500 million senior notes due 2016 and placed the rating on CreditWatch with negative implications.

The BB corporate credit rating remains on CreditWatch with negative implications, where it was placed on March 9, following the company's proposed acquisition.

"The company expects to use proceeds from the proposed notes, combined with proceeds from a recently completed secondary equity offering, to finance the previously announced acquisition of Rio Tinto plc's Jacobs Ranch mining complex in Wyoming for approximately $761 million in cash," S&P analyst Maurice Austin said in a statement.

S&P said it expects management to continue to look for growth opportunities, with a debt-to-EBITDA ratio likely to remain above 4x.

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