Moody's lifts Murray, gives notes at Caa2

Moody's Investors Service said it upgraded Murray Energy Corp.'s corporate family rating and probability of default rating to B3 from Caa1, and the rating on the existing $540 million senior secured notes due 2015 to B2 from Caa1.

Moody's said it also assigned a Caa2 rating to the proposed $150 million of senior unsecured notes due 2017.

The outlook is stable. The company intends to use the net proceeds from this offering, together with cash on hand, to fund capital expenditures, the agency said.

The rating upgrades reflect Moody's expectations that intermediate term expansion projects at Murray's existing mines - including a new longwall in Northern Appalachia and upgrades to existing longwall equipment - could improve its assets, materially reduce unit costs and improve longer-term ability to generate EBITDA and cash flow, the agency added.

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