Moody's affirms Griffin Coal

Moody's Investors Service said it affirmed the Ba2 corporate family and Ba2 senior unsecured ratings of The Griffin Coal Mining Co. Pty Ltd. The affirmation follows Griffin's decision to further upsize its recent $400 million bond issue to $475 million.

The outlook remains negative.

While the additional funding increases Griffin's debt commitments the increase is not material enough to move the rating and is ameliorated to a small degree by a $25 million reduction in the debt carve-out allowed within the bond indenture, Moody's said. The maintenance of cash reserves - arising form the upsizing of the bond - provides additional rating support, the agency said.

Moody's said it would not expect the outlook to be stabilized prior to the completion of its Bluewaters I project and carbonized coal plant. Successful commissioning of both would ameliorate the associated execution risk. Once completed, Moody's said it also would look for evidence of deleveraging and upward rating pressure may be reflected by an adjusted debt-to-EBITDA ratio of below 3.5x, the agency said.

The ratings could come under downward pressure should Griffin lose a key customer or experience delays in the commissioning of the power stations, Moody's added.

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