Moody’s Investors Service downgraded all ratings of Foresight Energy, including the corporate family rating to Caa1 from B3, the probability of default rating (PDR) to Caa1-PD from B3-PD, senior unsecured rating to Caa3 from Caa2 and senior secured rating to B2 from B1. The speculative grade liquidity rating is unchanged at SGL-4. The outlook is negative.

The downgrade reflects the continued headwinds in the coal sector and the recent deterioration in seaborne and domestic coal prices, which we expect to persist, putting pressure on average realizations over the next two years as higher priced contracts roll off.

The downgrade also reflects the prolonged continued negotiation with the company’s creditors associated with an ongoing litigation by trustee for the bondholders of the company’s 2021 senior notes, alleging that a change of control event had occurred as a result of the Murray acquisition in 2015.