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Jul. 2, 2015, 11:39 AM
- Walter Energy’s (WLT -6.7%) senior creditors are entering confidential talks with the company to reorganize it in bankruptcy court and hand ownership to the lenders, Bloomberg reports.
- The group, which owns WLT’s first-lien bonds and loans, reportedly will submit a draft plan to the coal miner that calls for converting their debt into equity.
- The senior lenders are said to want WLT to file for bankruptcy by July 15, when the grace period on a $19M interest payment due to junior bondholders ends.
- WLT has been discussing a reorganization since April as it struggles with a $3.1B debt load and the coal downturn.
Jun. 30, 2015, 11:25 AM
- Coal companies (KOL -0.8%) are surrendering much of the gains they enjoyed following yesterday's Supreme Court decision against the EPA's mercury emissions regulations, as the initial reaction may prove rosier than the actual benefit to the coal industry.
- The consensus is that the ruling might force the EPA to be less aggressive about its efforts to cut pollution but will not help coal overcome competition from gas and alternative energy; also, the oversupply of natural gas likely will continue to depress the price of gas and reduce coal sales.
- The ruling could prove too late to provide a reprieve for most of the utilities that already had spent the resources to retrofit or retire, Sterne Agee analysts say, but lower MATS compliance operating costs could help some PRB coal power plants compete more aggressively on the margin with gas-fired power plants.
- Citigroup notes the news has important implications for the Clean Power Plan proposal scheduled to be finalized mid-summer 2015, and views the ruling as a net positive for the U.S. thermal coal market and miners such as Peabody Energy (BTU -11.3%), Alliance Resource Partners (ARLP +1.5%),Alliance Holdings (AHGP -0.1%) and Foresight Energy (FELP +0.1%).
- Also: ACI -4.7%, ANR -6.9%, CLD -7%, WLB -2.9%, WLT -12.9%.
Jun. 29, 2015, 11:38 AM
- Coal stocks (KOL +0.3%) are rallying after the Supreme Court threw out the EPA’s first-ever rules requiring coal-fired power plants to cut emissions of mercury and other toxic air pollutants, saying the agency should have weighed the cost of compliance in deciding whether to regulate.
- The ruling means the EPA must go back to the drawing board, which possibly could push any new emissions rules past Pres. Obama’s time in office.
- Coal companies are enjoying hefty gains: WLT +28.2%, ACI +15.1%, BTU +11.2%, ANR +5.4%, CLD +5.2%, RNO +3.9%, WLB +1.9%, CNX +1.4%.
- Select utility names also are seeing some strength: AEP +1%, PCG +0.9%, D +0.6%, NEE +0.6%, EXC +0.3%.
Jun. 26, 2015, 11:38 AM
- Peabody Energy (BTU -10.2%) sees continued weakness, down ~10% so far today and 20% on the week, although all coal mining shares (KOL -1.5%) have been hammered in recent days.
- Moody's downgraded BTU's corporate credit rating last night to B3 from B2 with a negative outlook, reflecting the rating agency's expectation of a more precipitous deterioration in the company's credit metrics than previously forecast due to the ongoing decline in the seaborne met coal markets.
- The firm sees BTU's debt/EBITDA ratio approaching 9x in 2015 and leverage remaining elevated at ~7x in 2016; absent asset sales, BTU is seen generating negative free cash flows in 2015 and 2016.
- However, BTU and other coal names have been sliding all week; Barron's Ben Levisohn speculates investors may be worried about the pending Supreme Court decision - in light of the Court's "having tilted leftward in its rulings" this week - on whether EPA rules that caused utilities to shutter some coal-fired plans are legal.
- Related tickers: ACI, WLB, CLD, ANR, WLT, CNX, NRP.
Jun. 12, 2015, 3:11 PM
- Peabody Energy (BTU -8.1%) and Arch Coal (ACI -12.3%) plunge to all-time intraday lows amid concerns that they will have to pay more for insurance that covers environmental damage.
- "Investors don’t know how to handicap this self-bonding issue,” says Doyle Trading CEO Ted O’Brien. "Until the companies come out and give Wall Street certainty that they know how to deal with it, I think we’re going to be stuck in this vortex."
- Wyoming regulators have told Alpha Natural Resources (ANR -10.6%) that it no longer qualifies for a self-bonding program which allows coal producers to cheaply insure their clean-up costs in case of bankruptcy, and are reviewing financial data from BTU and ACI to see if they still qualify.
- Two other coal miners, Cloud Peak Energy (CLD -6.7%) and Walter Energy (WLT -8.2%), also have sunk to record intraday lows.
- ETF: KOL
Jun. 10, 2015, 2:45 PM
- U.S. coal companies worried about the Obama administration’s proposed clean air rules actually face a bigger threat: cheap, abundant natural gas, which is crushing coal prices with no letup in sight, according to a Bloomberg report.
- Shale formations in the eastern U.S. are yielding record amounts of gas, pushing prices of the fuel in the region below coal, which already had been 60% less expensive on average since 2001; as power generators use more gas, coal is piling up at the fastest rate since 2009.
- U.S. utilities are on track to end 2015 with 171M tons of coal in reserve, the highest since 2012, says a BB&T analyst - “It’s going to be ugly,” says Doyle Trading's Hans Daniels. “When stocks build up like that, it just defers the pain for the coal companies.”
- Most coal names are sharply lower: BTU -2.1%, ANR -9.7%, ACI -8.4%, CLD +0.9%, WLB -1.9%, CNX -1.1%, WLT -1.6%.
- ETFs: UNG, UGAZ, DGAZ, KOL, BOIL, GAZ, KOLD, UNL, DCNG
Jun. 9, 2015, 10:33 AM
- Beaten-down Walter Energy (WLT +8.2%) rebounds a bit after S&P raises its corporate credit rating to CCC- from D, citing WLT's payment of $62M in total interest payments on its 9.5% senior secured notes due 2019 and its 8.5% senior notes due 2021.
- However, S&P says WLT has an unsustainable debt level, and it anticipates a default-triggering event to occur unless its debt is restructured in the next six months.
- S&P retains its negative outlook, reflecting expectations that weak met coal market conditions will persist over the next 12 months.
Jun. 8, 2015, 11:48 AM
- Walter Energy (WLT -30.8%) plunges in reaction to a report late Friday that it is working with its lenders to finalize plans for filing for Chapter 11 bankruptcy, and share prices of other coal producers also are lower.
- Cowen analysts say a WLT bankruptcy filing was widely expected but more are likely to come as companies evaluate their options; some may be able to steer clear of bankruptcy but will exit the downturn shackled by major debt service and competing with others that reorganize and exit the downturn leaner and meaner, the firm says.
- Also: BTU -0.9%, ACI -1.9%, ANR -0.6%, CLD -1.2%.
Jun. 5, 2015, 6:21 PM
- Walter Energy (NYSE:WLT) -4.2% AH after a Bloomberg reports says the coal miner is negotiating a debt restructuring with senior lenders that could put it into bankruptcy as soon as this month.
- WLT reportedly will send a revised plan to first-lien lenders that includes a request for a debtor-in-possession loan that would allow it to operate while in bankruptcy.
- WLT has been in talks with lenders for nearly two months on a reorganization as it struggles amid the coal downturn.
May 8, 2015, 8:56 AM
- Walter Energy (NYSE:WLT) +32.3% premarket after confirming last night that it will make interest payments and continue discussions with debtholders to explore alternatives to recapitalize its balance sheet amid a difficult met coal pricing environment.
- WLT says on May 15 it will make interest payments under its indenture agreements with holders of its 9.5% senior secured notes due in 2019 and 8.5% senior notes due in 2021.
- WLT had entered a 30-day grace period after missing interest payments that were due April 15.
Feb. 17, 2015, 9:17 AM
- Walter Energy (NYSE:WLT) -10.1% premarket after reporting a wider than expected Q4 loss and revenues that fell well short of analyst estimates.
- WLT says Q4 sales of metallurgical coal sales declined to 2M metric tons from 2.9M, and forecasts 2015 met coal sales to fall to 8.5M-9M metric tons from 9.7M in 2014.
- Expects 2015 capex to be in line with 2014, while further reducing SG&A expenses by 10%.
- WLT suspended its quarterly dividend last month, following cuts or reductions at rivals Peabody Energy (NYSE:BTU) and Arch Coal (NYSE:ACI).
Feb. 17, 2015, 9:14 AM
Feb. 3, 2015, 10:46 AM
- Arch Coal (ACI +8.9%) opens sharply higher after reporting a smaller than expected Q4 loss as it cut costs to $16.46/ton from $18.10/ton in the prior-year quarter.
- ACI says it is suspending its annual dividend to preserve current levels of liquidity, although Cowen analysts say the suspension will save only ~$2M/year.
- ACI says it had available liquidity of ~$1.2B at year-end 2014.
- Expects costs in the Powder River Basin and Appalachian region, which account for most of its coal production, to fall in 2015, reflecting an improved rail performance, the impact of lower diesel prices and a full year of steady production at its low-cost Leer mine in West Virginia.
- ACI also says it expects capital spending of $145M-$160M in 2015, roughly flat vs. 2014's $147M in capex.
- Forecasts FY 2015 coal sales of 130M-143M tons after selling 134.4M tons in 2014 and 35.2M tons in Q4 (+9% Y/Y).
- Other coal names also are higher: ANR +7.8%, BTU +5.6%, CLD +2.3%, WLB +2.6%, WLT +9.4%, CNX +1.7%, RNO +4.3%.
Jan. 27, 2015, 4:42 PM
- Walter Energy (NYSE:WLT) +1.9% AH on news it is suspending its quarterly dividend to enhance financial flexibility in light of current metallurgical coal market conditions.
- WLT previously paid a quarterly dividend of $0.01/share.
- Fellow coal company Peabody Energy dropped 6.5% today after cutting its dividend to less than a penny a share.
Jan. 27, 2015, 11:28 AM
- Peabody Energy's (BTU -6.7%) move to slash its quarterly dividend to less than a penny a share is helping push coal company stocks (NYSEARCA:KOL) lower: WLT -1.6%, ACI -1%, CNX -1.8%, CLD -2%, WLB -5.4%, ARLP -1.2%.
- Cowen analysts see the move as "a prudent move amid uncertain coal markets," and Sterne Agee says the dividend cut will save BTU $100M in annual cash payments.
- Citigroup's Brian Hu maintains a Buy rating on BTU, saying that although management expects U.S. thermal coal demand to fall by 50M-60M tons in 2015, "BTU is better insulated due to their heavily contracted position and Y/Y improvement in Southern PRB rail performance.”
Jan. 22, 2015, 12:45 PM
Walter Energy Inc is engaged in the business of mining and exporting of metallurgical coal for the steel industry from underground and surface mines with mineral reserves located in the United States, Canada and United Kingdom.
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