S&P rates Murray Energy loan BB-, notes B+

Standard & Poor's said it assigned a B corporate credit rating to Murray Energy Corp., a BB- rating with a 1 recovery rating to its proposed $25 million senior secured revolving credit facility due 2012 and a B+ rating with a 2 recovery rating to its proposed $440 million second-lien secured notes due 2015.

The outlook is stable.

Murray will use the proceeds from the proposed notes, combined with excess cash balances, to repay outstanding amounts under its existing senior secured credit facility.

The agency said the ratings on Murray reflect the combination of its vulnerable business risk profile and aggressive financial risk profile as well as its relatively small size, lack of operating diversity, high customer concentration and high debt levels.

At the same time, the company maintains a relatively favorable cost profile, benefits from long-term contracts and is expected to maintain appropriate liquidity for its B rating, S&P said.

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