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Dec. 8, 2015, 7:12 PM
- The Obama administration is concerned that the self-bonding coal mine cleanup program could leave taxpayers with multibillion-dollar liabilities, a U.S. Interior Department official says.
- Self-bond liabilities totaling ~$3.6B could fall to taxpayers and righting the program "is a huge priority," the official says, according to Reuters.
- Alpha Natural Resources (OTCPK:ANRZQ) left behind more than $670M in self-bond liabilities when it filed for bankruptcy in August, and the government has not determined how best to protect taxpayers from the hit.
- Relevant tickers: KOL, BTU, ACI, CLD, WLB, CNX
Nov. 11, 2015, 3:56 PM
- Alpha Natural Resources (OTCPK:ANRZQ) is seeking to eliminate health and other non-pension benefits for more than 4,500 non-union retirees and their eligible spouses and dependents, calling the benefits a financial burden representing a ~$125M liability on its balance sheet, it said in a filing in U.S. Bankruptcy Court in Richmond.
- ANR says it believes it has the authority under applicable contract and bankruptcy law to terminate or amend the benefits in the ordinary course of its business, and seeks the court's approval "out of an abundance of caution, in the event that the proposed termination of non-pension retiree benefits is found to be outside the ordinary course of the debtors' business."
Sep. 15, 2015, 3:48 PM
- Alpha Natural Resources (NYSE:ANR) hammers out deals with creditors and representatives of its coal mine workforce in a bid to win court approval of a $692M bankruptcy loan.
- After the bankruptcy loan ANR brought to court today marked a "dramatic change" from an earlier version that drew a volley of criticism, according to a lawyer for the group representing the coal company's unsecured creditors, the bankruptcy judge indicated he will sign off on the Chapter 11 financing deal.
- Burdened with $4B in debt, ANR is trying to revamp its business to survive the slump in coal prices and avoid being pushed to the Chapter 11 auction block.
Aug. 3, 2015, 12:42 PM
- With Alpha Natural Resources (NYSE:ANR) filing for bankruptcy, Fitch Ratings among others thinks Arch Coal (NYSE:ACI) is next, but Cowen analysts believe ACI may escape ANR’s fate.
- The firm cuts its rating on ACI to Market Perform from Outperform with a $0.25 price target but believes investors should not give up on the stock entirely, noting the company has been “proactive in addressing debt levels with a private debt offering, has managed its cash burn, and is pursuing a reverse stock split.”
- ACI is better positioned than ANR or Walter Energy (NYSE:WLT), Cowen says, as its operations were cash margin positive in H1, cash flow is expected to be break even to slightly up for the rest of the year, and a majority of its open Powder River Basin book is skewed towards higher Btu coal which commands better pricing.
- Today, ACI announced an extension of its private debt exchange offer.
Aug. 3, 2015, 9:12 AM
- Alpha Natural Resources (NYSE:ANR) confirms it has filed for Chapter 11 bankruptcy protection, in an effort to cut its more than $3B debt load.
- ANR says it has secured an 18-month debtor-in-possession financing package totaling up to ~$692M, arranged by Citigroup, and led by a group of both its first and second lien lenders.
- ANR chose to file for bankruptcy rather than repaying a convertible bond due at the start of this month, despite having $476M in cash as of March 31.
Jul. 30, 2015, 4:06 PM
- Alpha Natural Resources (NYSE:ANR) plans to file for Chapter 11 bankruptcy as soon as Monday, Bloomberg reports.
- ANR’s senior lenders including Citigroup and Davidson Kempner Capital Management reportedly plan to provide a loan to fund the company through bankruptcy.
- ANR would not repay $109M of 3.25% convertible notes by an Aug. 1 maturity date, according to the report.
Jul. 22, 2015, 11:34 AM
- J.P. Morgan finally gets around to downgrading Peabody Energy (BTU +11.7%), cutting its rating to Neutral from Overweight, two days after shares hit a 52-week low.
- After Arch Coal ([ACI]] +1.1%) and Alpha Natural’s (ANR +8.1%) share prices fell below $1, the spotlight fell on BTU, the firm explains, adding that the stock is vulnerable to squeezes, as 36% of BTU equity is now shorted; but in view of the firm's cautious commodity view on natural gas into year's end, it says it is "uncomfortable" with its Overweight rating on BTU.
- JPM says its coal Overweights are now restricted to Alliance Resource Partners (ARLP -1.9%) and Foresight Energy (FELP +2.1%).
Jul. 21, 2015, 3:14 PM
- Alarm bells are ringing for Joy Global (JOY -2.2%) and its ability to weather a capital spending slump among miners that include some of the company's biggest customers, J.P. Morgan analysts say.
- A combined 60% of JOY’s trailing 12-month sales were to North American and Latin American customers, many of which are coming under increasing financial pressure, which prompts the analysts to expect JOY’s earnings and balance sheet to come under pressure into FY 2016.
- JPM sees some of JOY's five biggest customers - ANR, SID, CLF, CMP and VALE - needing to further reduce capex, as well as push out receivables, off-load inventories to suppliers and in-source maintenance labor (~20% of JOY’s service business).
Jul. 20, 2015, 12:59 PM
- Alpha Natural Resources (ANR -21%) is downgraded to Neutral from Buy at Sterne Agee CRT - odd timing, since the coal miner has lost more than 85% of its value YTD and now trades at less than $0.10/share.
- While ANR indicated total liquidity of $1.8B as of March 31 and continues to explore options for capital structure improvement, the firm believes investor focus will shift toward distressed credit and legal news flow.
- The NYSE said last week that it will begin de-listing proceedings, and recent reports say ANR has entered into discussions with various parties regarding the potential of a bankruptcy filing.
Jul. 16, 2015, 10:27 AM
- The NYSE says it is delisting Alpha Natural Resources (NYSE:ANR), based on "abnormally low" price indications; shares are halted but were -37% premarket.
- WSJ reported yesterday that ANR was engaged in potential restructuring negotiations with senior lenders; Walter Energy filed Chapter 11 on the same day.
- Other coal companies are mostly higher in early trading: ACI -0.6%, BTU +1.3%, CLD +1.2%, WLB +2.1%.
Jul. 15, 2015, 5:26 PM
- Alpha Natural Resources (NYSE:ANR) is in talks to obtain financing for a potential bankruptcy filing early next month, WSJ reports.
- ANR reportedly is negotiating the terms of a $300M-$400M debtor-in-possession loan with its loan holders and senior bondholders,which would help see it through bankruptcy should it file for chapter 11 protection in early August, near the time some of its convertible bonds come due.
- ANR is still exploring options to improve its capital structure, and a bankruptcy filing is not inevitable, the report says.
- ANR -32.8% AH.
Jul. 14, 2015, 3:43 PM
- Challenging results should be expected across the spectrum of coal producers, including Peabody Energy (BTU -3.3%), Cloud Peak Energy (CLD -1.5%), Alpha Natural Resources (ANR +0.6%) and Arch Coal (ACI +5.1%), Cowen analysts maintain, seeing average Q2 EBITDA estimates for the group ~4% below consensus.
- Among the coal names, Cowen says it is farthest below consensus for ACI (13% below consensus) and ANR (27% below consensus); amid deteriorating financial conditions, self-bonding capacity has become a hot topic for these companies and will be at the forefront of Q2 earnings calls.
- Cowen considers Alliance Resource Partners (ARLP +0.2%) its top pick and believes the company's White Oak transaction solidifies distribution growth potential; the firm rates ARLP, ACI and Foresight Energy (FELP -2.3%) at Outperform, and Natural Resource Partners (NRP -1.3%) and Teck Resources (TCK -0.2%) at Market Perform.
Jul. 13, 2015, 12:49 PM
- For a real sense of coal's diminishing prospects (NYSEARCA:KOL), check out what is happening in the bond market, where three of the biggest U.S. coal producers had the worst-performing bonds for Q2: Alpha Natural Resources (NYSE:ANR) -70%, Peabody Energy (NYSE:BTU) -40%, Arch Coal (NYSE:ACI) -30%.
- Bonds are where coal companies traditionally turn to raise money for new mines and environmental cleanups, but investors are increasingly reluctant to lend to them, as coal bond prices tumbled 17% in Q2, Bloomberg reports.
- Even setting aside environmental and health issues, renewables are on a trajectory to outcompete fossil fuels, starting with coal; between now and 2040, two-thirds of the money spent on adding new electricity capacity worldwide will be spent on renewables, according to the analysis.
Jul. 13, 2015, 4:58 AM
- U.S. power stations generated 31% of electricity from natural gas in April compared with 30% from coal, research firm SNL Energy estimates, the first time that gas has overtaken coal. In 2010, the latter accounted for 45% of power.
- The milestone has been a long time in coming, with the shale boom causing gas prices to plummet and increasing regulation leading to higher expenses for coal.
- Coal tickers: WLT, ACI, BTU, ANR, CLD, RNO, WLB, CNX,
Jul. 9, 2015, 5:56 PM
- J.P. Morgan's John Bridges sees “no near term positive catalysts" for beaten-down coal stocks such as Peabody Energy (NYSE:BTU), Alliance Resource Partners (NASDAQ:ARLP), Foresight Energy (NYSE:FELP) and Cloud Peak Energy (NYSE:CLD).
- The analyst notes that BTU has announced that it has overcome requests from Wyoming over self bonding of reclamation liabilities, but both Arch Coal (NYSE:ACI) and Alpha Natural Resources (NYSE:ANR) remain under review; BTU, ACI and ANR "appear to have ~24 months before the risk of a 'maturity wall' of expiring debt though equity values may imply some thoughts about proactive filing."
- Bridges lowers its stock price targets for BTU to $5 from $7, ARLP to $33 from $40, and FELP to $17 from $18, and CLD to $6.50 from $7.
Jul. 8, 2015, 4:56 PM
- Alpha Natural Resources (NYSE:ANR) says it has told nearly 300 employees at six mines and a processing plant in southwest Virginia and eastern Kentucky that it expects to idle the facilities in anticipation of their potential sale.
- The affected operations are Mill Branch's Dorchester and Osaka deep mines; North Fork Coal's North Fork No. 6 deep mine, and its already idled Panther No. 1, Stillhouse No. 1 and North Fork No. 7 mines; and Pigeon Creek's Plant No. 1.
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