S&P alters Arch Resources view to stable

S&P said it changed Arch Resources Inc.’s outlook to stable from negative and affirmed its B- issuer rating.

The B issue-level rating on Arch's senior secured debt is unchanged, with a 2 recovery rating, indicating an expectation for high (75%-90%; rounded estimate: 80%) recovery in default.

The agency said it forecasts Arch’s free operating cash flow will turn positive to about $100 million in the second half of 2021 and possibly $350 million to $380 million in 2022 on higher volume.

“We anticipate 70%-80% of 2022 met coal production (about 9.5 million tons) will be sold on the international spot market, where high-vol A prices have reached $390/ton recently, compared with historical averages of about $140/ton,” S&P said in a press release.

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