Moody's alters Arch Resources view to positive

Moody's Investors Service said it affirmed all ratings for Arch Resources, Inc., including the company's B2 corporate family rating and revised the outlook to positive from stable based largely on the expectation that the company will reduce debt and non-debt liabilities in the near-term.

Moody's also upgraded the company's speculative grade liquidity rating to SGL-1 from SGL-2 based on expectations for meaningfully stronger free cash flow generation in the next 12-18 months.

"Arch completed the Leer South project on time and on budget. Given the recent strengthening in coal market fundamentals, stronger export prices, and meaningfully lower capital spending, Arch should generate significant free cash flow in 2022 that will allow the company to reduce debt," said Ben Nelson, Moody's vice president, senior credit officer and lead analyst for Arch Resources, in a press release.

The SGL upgrade reflects an expectation for very good liquidity to support operations over the next 12-18 months, the agency said.

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