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Moody’s downgrades Peabody

Keywords: Tags  Peabody Energy, Moody's Investors Service, downgrade, metallurgical coal

NEW YORK — Moody’s Investors Service Inc. has downgraded coal producer Peabody Energy Corp.’s corporate family rating to Ba2 from Ba1 on expectations of a weak metallurgical and thermal coal market over the next 12 to 18 months

Moody’s said, however, that the outlook for the St. Louis-based company is stable.

"We anticipate revenue and Ebitda (earnings before interest, taxes, depreciation and amortization) generated by Peabody’s Australian business to decline in 2014 due to lower metallurgical and seaborne thermal coal prices," Moody’s said.

Benchmark settlement prices for high-quality metallurgical coal will rise above the recent settlement of $145 per tonne but will remain below $160 due to additional supplies coming online worldwide and "persistently weak demand" from the global steel industry, the ratings agency said.

A version of this article was first published by AMM sister publication Steel First.

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