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Murray Energy gets credit upgrade, stable outlook after coal company refinances

Murray Energy Corp. received an upgraded corporate credit rating from S&P Global Ratings based on the refinancing of its revolving credit facility.

The Ohio-based company refinanced its $225 million asset-based lending revolving credit facility due in December with a $135 million asset-based lending revolving facility and $90 million first-in, last-out term loan, both maturing in 2021. The facilities provide Murray Energy with additional liquidity and indicate the company has some ability to refinance part of its capital structure, S&P Global Ratings wrote in a July 2 research update.

Murray Energy is now rated a "B-," up from a "CCC+" rating. At the same time, the rating agency raised the issue-level rating on various Murray Energy debt based on a stable outlook indicating the view that Murray Energy can meet its financial commitments over the next 12 months.

"The company continues to operate in a depressed domestic demand environment that it partially offsets by pivoting to more attractive export markets, potentially doubling its export volumes to around 10 million tons in 2018 from 5 million tons in the prior year," according to the note. "We think the company's capacity to refinance or repay in full its next sizable maturity of $326 million senior notes due in 2021 will depend on its ability to build significant cash balances and exercise prudent risk management, including executing its operating plan in the next 12 months."

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.