Moody’s rates Contura loan B3

Moody's Investors Service said it assigned a B3 rating to Contura Energy Inc.'s new $562 million senior secured term loan due 2024.

Proceeds will be used to refinance the company's existing term loan and fund transaction-related fees and expenses.

Contura's other ratings are unchanged, including the B2 corporate family rating, B2-PD probability of default rating, and SGL-2 speculative grade liquidity rating.

The outlook is unchanged at stable.

“The refinancing transaction increases financial flexibility, but represents a credit-negative development because it signals that debt reduction is likely to be less significant than would have been required under the existing credit agreement and allows the company the ability to do more aggressive shareholder returns,” Ben Nelson, Moody's vice president, senior credit officer and lead analyst, said in a news release.

“However, the debt is prepayable and the company will retain the ability to reduce debt in an unfavorable market environment.”

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