Moody's rates International Coal notes Caa1

Moody's Investors Service said it assigned a Caa1 (LGD 4; 57%) rating to the International Coal Group's new $200 million second-lien senior secured notes due 2018. The agency also said it affirmed its corporate family rating at Caa1, probability of default at Caa1, $125 million asset-based loan facility due 2014 at Ba3 (LGD 2; 18%) and speculative grade liquidity at SGL-3.

The outlook remains stable.

The company is issuing about $200 million of new senior secured second lien notes and $75 million of new convertible notes, Moody's said. The proceeds are expected to refinance $140 million of existing 9% convertible notes and $175 million of 10¼% senior unsecured notes.

The affirmation considers the $40 million reduction in expected debt levels, less interest expense and improved maturity profile, the agency said.

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