Moody's may lower Massey Energy

Moody's Investors Service said it placed Massey Energy Co.'s Ba3 corporate family rating and all other ratings under review for possible downgrade.

Ratings placed under review include the company's $360 million 6 5/8% guaranteed senior unsecured notes due Nov. 15, 2010 at Ba3, $175 million 2¼% guaranteed senior unsecured convertible notes due April 1, 2024 at Ba3, $220 million 6.95% guaranteed senior unsecured notes due March 1, 2007 at B1, $132 million 4¾% guaranteed senior unsecured convertible notes due May 15, 2023 at B1 and corporate family rating at Ba3.

The review follows Massey's announcement that it will issue $725 million of senior notes and undertake tender and exchange offers for $527 million of senior and convertible notes. Moody's estimates that Massey's debt will increase by about $200 million if the tender and exchange offers are successful.

The review reflects the higher debt level, Massey's continued inability to meet production targets, and its intention to use free cash flow to buy back shares. The review is expected to conclude within the next week to 10 days, Moody's said.

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