Fitch ups EES Coke notes to BBB-

Fitch Ratings said it upgraded EES Coke Battery LLC's $75 million senior secured series B notes due 2007 to BBB- from CCC and removed the notes from Rating Watch positive.

The rating action is due to improved recent and projected financial and operating performance, the agency said. EES Coke has entered into a coke purchase agreement with Mittal Steel USA Inc. for 2006 through 2015.

For years 2006 through 2010, the coke purchase agreement is a requirements contract; Mittal Steel USA is required to buy up to 100% of EES Coke's production only if it needs it. Fitch said it believes that Mittal Steel USA will purchase all of EES Coke's production through the maturity of the series B notes, according to current outlooks for steel production and coke demand.

The rating upgrade also reflects EES Coke's strong cash flow and restricted cash balances in recent reporting periods and debt service coverage of about 1.8x over the remaining term of the debt, the agency said.

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