Moody's rates International Coal loan B2

Moody's Investors Service said it assigned a B2 rating to each of International Coal Group's proposed $50 million five-year secured revolving credit facility, $40 million six-year secured synthetic letter-of-credit facility, and $155 million six-year secured term loan B.

The outlook is stable.

According to Moody's, the B2 senior implied rating considers the company's recent formation and small size, the significant portion of old mining equipment and the high capital expenditure program to be undertaken for purposes of replacing overworked and leased equipment, and the company's relatively low percentage of committed coal contracts and their short duration.

The ratings also reflect anticipated stable long-term demand for coal, current high prices for steam coal, relatively low financial leverage, reasonable cost position, and a low level of pension, black lung, OPEB and reclamation obligations relative to its coal mining peers.

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