Moody's downgraded Westmoreland Coal Co.'s probability of default rating and withdrew all its ratings for the coal producer after Westmoreland and its master limited partnership, Westmoreland Resource Partners LP, filed for Chapter 11 bankruptcy protection Oct. 9.
The probability of default rating was lowered from Caa3-PD to D-PD, or default on all long-term debt obligations. Westmoreland's corporate family rating was downgraded from Caa3 to C, and all instrument ratings from Ca to C. The rating agency maintained its speculative grade liquidity rating at SGL-4, meaning weak liquidity, with a stable outlook.
"Management believes that liquidity from operations combined with the company's debtor-in-possession financing (unrated) is sufficient to continue operating its mines in the normal course of business, without any expected impact to current output levels, though in our view the ultimate impact of the filings remains unclear," Moody's said in an Oct. 11 note.
S&P Global Ratings withdrew all ratings on Westmoreland and its issuing subsidiary Oxford Mining Co. LLC on Sept. 7 at the issuer's request.
S&P Global Ratings and S&P Global Market Intelligence are both owned by S&P Global Inc.