Moody's Investors Service changed its outlook on Peabody Energy Corp. BTU +0.23% to stable from developing after the coal company said it would it would offer notes to pay for its acquisition of Macarthur Coal Ltd.

Last month, Peabody the largest US coal producer by output completed its roughly USD 5.05 billion bid with steelmaker ArcelorMittal for the Australia based coal miner, giving Peabody an even larger stake in Australia. ArcelorMittal has said it plans to sell its stake to Peabody.

On Monday, Moody's said that while the acquisition will help Peabody access valuable resources in Australia and increase its production of a high-margin type of coal, it will also expose the company more to volatility in prices for metallurgical coal, which tend to rise and fall with the global steel industry.