- Arch Coal (NYSE:ACI) and Peabody Energy (NYSE:BTU) have "a reasonable likelihood of default," Fitch Ratings says, noting that bankruptcy filings from both companies would leave 55% of average coal industry debt in default.
- An ACI default is "more likely," Fitch says, expecting a bankruptcy filing or default triggered by a missed interest payment before year-end, while BTU is "marginally less dire given its lack of near term maturities and sufficient liquidity to sustain operations for the time being, but there is substantial credit risk."
- Although a potential 55% coal bond default rate is "enormous," Fitch says coal debt is just a $15B slice of the $1.43T junk bond market.