Moody's raises EES Coke Battery

Moody's Investor Service said it upgraded the rating for EES Coke Battery Co. Inc.'s series B notes due 2007 to B2 from Caa1.

The outlook is positive.

Moody's said the rating action reflects improved predictability for near-term cash flow resulting from sales under the firm coke sales agreement and coke oven gas sales agreement with United States Steel (senior unsecured B1). These agreements replaced interim contracts that were initially established for the period from May 2003 through December 2003, but remained in place on an interim basis.

The new agreements take effect retroactive to Jan. 1, 2004.

Moody's said the rating action also considers the dramatic improvement in the market for coke, which has experienced substantially higher short-term prices. While the agreements with U.S. Steel are only short term (100% requirement for U.S. Steel's Great Lakes steel facility in 2004, and a 25% requirement in 2005), the recent contracts are evidence of the current competitiveness of EES Coke Battery as a supplier.

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