Fitch Affirms Peabody Energy's IDR At 'BB'; Outlook Revised To Negative

(RTTNews) - Fitch Ratings said Thursday that it has affirmed Peabody Energy Corp.'s (BTU) Issuer Default Rating at 'BB'.

The Rating Outlook has been revised to Negative. Fitch believes the coal markets are at or near the bottom of the cycle and should begin to show a slow recovery. The Negative Outlook reflects the possibility that overcapacity persists in the metallurgical coal market and the hard coking coal benchmark price remains below $150/tonne beyond the next 12-18 months, the rating agency said.

Fitch said Peabody's ratings reflect large, well-diversified operations and good control of its low-cost production. The credit ratings also reflect high financial leverage following the acquisition of Macarthur Coal Ltd. in an all-cash deal in the fourth quarter of 2011.