Moody's affirms Murray Energy

Moody's Investors Service said it affirmed the Caa1 corporate family and probability-of-default ratings of Murray Energy Corp., affirmed the Caa1 (LGD3, 44%, revised from 46%) rating on its senior secured second-lien notes due 2015 and withdrew the B1 (LGD1, 4%) rating on the proposed $25 million revolving first-lien senior secured credit facility due 2012.

The outlook is stable.

The rating actions follow the upsizing of the notes to $500 million from $440 million and the cancellation of the revolver. The proceeds from the notes, along with cash on hand, are still expected be used to refinance approximately $485 million of existing first-, second- and third-lien debt.

The agency said Murray's Caa1 corporate family rating reflects significant debt levels, concentration of EBITDA at key coal mines, production risk stemming from challenging operating conditions and geologic risks, annual production of approximately 25 million tons and, in Moody's opinion, the weak external liquidity given the absence of a committed revolver.

The ratings are supported by the company's long-term contracts with highly-rated utility customers, experience with longwall mining, freight advantages associated with water-based transportation and proximity to customers and largely union-free workforce, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.