Moody's rates Alpha Natural loan, notes

Moody's Investors Service said it assigned a B3 rating to Alpha Natural Resources LLC's proposed $200 million senior unsecured notes due 2012 and a B1 rating to its $175 million senior secured five-year credit facility.

The outlook is stable.

Moody's said the B2 senior implied rating considers Alpha's short life as a separate corporate entity, the relatively high geologic and operating risks and costs of its Appalachian coal operations, the short duration of its sales contracts, and the company's acquisition growth strategy.

The ratings also reflect anticipated stable long-term demand for coal, current high prices for metallurgical and steam coal, ownership by affiliates of First Reserve Corp. and the owners of American Metals & Coal International, and the company's low level of pension, black lung, pension and OPEB obligations relative to its coal mining peers.

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