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On December 14, 2020, S&P Global Ratings affirmed its CCC+ issuer credit rating on Contura Energy, Inc. and its senior secured debt rating at CCC+. Contura is at heightened risk of material tightening of liquidity due to diminished financial covenant cushion and potential collateral calls, according to the ratings agency. Additionally, the deep discount on Contura's rated debt indicates increasingly difficult and costly access to capital for coal producers even as the Company shifts to a pure-play metallurgical (met) coal producer. S&P Global views Contura's business as vulnerable due to declining thermal demand and prices, which is driving the Company to exit these operations and begin reclamation work at some of its mines. The completed sale of Cumberland mine in the Northern Appalachia region will reduce the Company's asset-retirement obligations (AROs) by about $169 million on undiscounted cash flow basis, says the ratings agency.
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