Moody's rates Coronado loans B1

Moody's Investors Service said it assigned provisional B1 (LGD 4) ratings to the new proposed senior secured term loans totaling $700 million issued by Coronado Australia Holdings Pty Ltd., a subsidiary of Coronado Group LLC.

The new ratings are assigned on a provisional basis, pending the conclusion of the acquisition of the Curragh mine in Australia, Moody's noted.

The proceeds of the new term loans, along with $180 million new equity contribution, will be used to finance the $473 million purchase price of the Curragh mine in Australia, repay Coronado's existing debt and retain more than $200 million of cash on the balance sheet, using $150 million to collateralize Curragh's reclamation obligations.

All existing ratings under Coronado Group LLC remain under review pending the closing of the transaction, S&P said.

If the transaction concludes as planned, S&P said it expects to upgrade the company's corporate family rating to CFR to B1 and withdraw the existing B3 rating on the existing senior secured bank credit facility.

The rating actions reflect the transformative nature of the transaction, the agency explained, as well as an expectation of continued conservative credit metrics.

If the transaction proceeds as planned, it will improve the operational diversity of the company as Coronado will expand its production to one of the world's largest metallurgical coal mines in Australia, Moody's said.

The transaction also will allow the company to offer a greater diversity of products to a broader base of metallurgical coal customers across diverse geographies, the agency said.

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