Tue, Jul. 28, 8:02 AM
Mon, Jul. 27, 5:30 PM
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Mon, Jul. 27, 4:45 PM
- Peabody Energy's (NYSE:BTU) credit is downgraded to CCC from B at Fitch, reflecting the rating firm’s view that liquidity could become constrained in the absence of higher metallurgical coal prices.
- Fitch believes BTU's 2015 EBITDA could total ~$400M while free cash flow burn could reach ~$500M; while Fitch thinks cash burn would slow in 2016 and reverse in 2017 with the roll-off of hedges and modest recovery in met coal prices, total debt with equity credit to EBITDA could rise above 7x in 2017, which could limit access to capital to refinance $1.5B notes due 2018.
- BTU, which is due to report earnings tomorrow morning, fell another 16.5% in today's trade to $1.03.
Wed, Jul. 22, 12:45 PM
Wed, Jul. 22, 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%).
Thu, Jul. 16, 8:48 PM
- The coal industry’s multi-employer pension fund is suing miners Peabody Energy (NYSE:BTU) and Arch Coal (NYSE:ACI) in an effort to saddle them with nearly $800M of liabilities Patriot Coal could escape in its bankruptcy.
- Patriot, which was formed from assets once owned by BTU and ACI, filed for Chapter 11 bankruptcy protection in May following a collapse in coal prices, and the fund argues that “a principal purpose” for the transactions creating what is now Patriot was "to evade or avoid their obligations to the 1974 Pension Plan."
- BTU says it “has no liability to the plan” and that the claims are without merit.
Thu, Jul. 16, 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%.
Tue, Jul. 14, 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.
Mon, Jul. 13, 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.
Mon, Jul. 13, 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,
Thu, Jul. 9, 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.
Wed, Jul. 8, 6:28 PM
- Peabody Energy (NYSE:BTU) +1.8% AH after agreeing to sell its Wilkie Creek Mine in Australia for $20M in cash and the assumption of $55M in liabilities.
- BTU had agreed to sell the mine in May 2014 for $70M to former billionaire Nathan Tinkler, but the deal collapsed after Tinkler failed to make payments.
- "We suspect anything and everything is for sale at the right price,” BB&T analyst Mark Levin says of BTU and the rest of the U.S. coal industry, but "the opportunity to get maximum value for these assets is limited.”
Wed, Jul. 8, 9:19 AM
- Peabody Energy (NYSE:BTU) discloses that Wyoming's environmental agency reaffirmed self-bonding eligibility for its three mine permits in the state.
- Regulators recently have raised questions about whether BTU and other coal miners meet the financial criteria to qualify for the government program that gives miners a discount on insuring clean-up costs in case of bankruptcy, as the fall in coal prices has put balance sheets under stress.
Thu, Jul. 2, 3:58 PM
- Peabody Energy (BTU +4.7%) and Thompson Creek Metals (TC -12.9%) at downgraded to Sell at Deutsche Bank, citing strained balance sheets and an uncertain deleveraging path forward.
- The firm trims its 12-month BTU price target to $1.30 from a prior $6 based on 0.5x (prior 0.8x) revised NAV of $2.6 (prior $8) and a 0.5% terminal growth rate.
- In downgrading TC, Deutsche Bank cites weak copper and moly prices, a highly levered balance sheet, further spending needs and a lack of expected near-term company catalysts.
Wed, Jul. 1, 6:56 PM
- Peabody Energy (NYSE:BTU) tumbled 19% in today's trade, touching an all-time low, after warning of a deeper than expected Q2 loss because of adverse weather and lower coal prices.
- Stifel analysts view an investment in BTU shares as "appropriate only for investors with a high tolerance for risk and uncertainty," as a highly levered balance sheet combined with an aggressive anti-coal U.S. policy environment and low natural gas prices all work together to increase risk levels to historic highs.
- Nevertheless, Sterne Agee stands by its Buy rating on the beaten-down coal miner, citing the new CEO's urgency in driving cost, productivity and liquidity improvements during the current difficult market, and further cost and asset sale news should serve as catalysts.
Wed, Jul. 1, 6:21 PM| Wed, Jul. 1, 6:21 PM | 6 Comments
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