there are many. just read the headlines out today. walter loads up on debt, met coal prices remain depressed and will stay that way for the next several years, oversupply hurting prices. this company is in a very weak financial position according to what I'm reading. Slapping a $2 price tag on Wlt looks says it all. BAC obviously sees big trouble not too far out. It will be a miracle if they survive.
Ben posted on this board to get out at $33. I told Rurkey it was a safe short and not to worry about take over rumors. I also posted 2 years ago that PCX,JRCC and WLT would go BK. To much met . To many steel companies buying their own mines in Australia . PRB coal is the place to be. Buy ACI and BTU. WLT built a new Met mine at the wrong time. They bought western coal and got nothing for their money . Very little coal reserves and high cost mines.
Yes WLT has 175 million tons of Bluecreek Met but most steel companies are using low cost PCI coal and high BTU coal for carbon with a electric Arc furnace. US steel is using NG to heat the iron ore and then adding cheaper PCI coal for the carbon in the steel.
On the other hand thermal PRB coal is going to be king because of cost and the future of coal will be value added products like CO2 capture where it is used to make gasoline and plastics and used to increase oil and NG production.
There are no problems for the shorts. They will cover some ad short again. Cover some and short again. They will continue this until 2.00 and then bankruptcy. Will go lower than the low of the day soon.
he Birmingham, Ala.-based coal producer sold $350 million in 11% second-lien PIK toggle notes due 2020 and $200 million (upsized from $100 million) in add-on 9.5% senior secured notes due 2019. The PIK notes priced at par and in line with price talk. The add-on 2019 bonds priced at 101.5% of par to yield 9.15%. Both tranches priced in line with price talk.
The company initially sold $450 million in the 2019 notes in September 2013. The add-on bonds bring the tranche total to $700 million.
Morgan Stanley, Barclays, Citigroup, Credit Agricole, Goldman Sachs, JPMorgan and Scotia were the bookrunners. The bonds were sold in a 144A sale. The PIK notes have a three-year non-call period and will allow the issuer to pay interest entirely in cash or in a combination of cash and PIK.
The company plans to use the proceeds to repay its $401 million term loan A in full and increase its liquidity. It also plans to amend its $375 million revolver to extend its maturities by 18 months and reduce its commitments to $314 until April 2016 and to $245 million until October 2017.
Moody’s Investors Service rated the PIK notes Caa1, gave a B3 rating to the add-on tranche and a B3 rating to its amended revolver. It affirmed the company’s Caa1 corporate family and probability of default ratings. Standard & Poor’s rated the PIK notes CCC and affirmed the company’s B- rating. It downgraded the company’s senior unsecured debt to CCC from CCC+.
Walter Energy had $2.8 billion in total debt as of Dec. 31, 2013. It reported a net loss of $359 million last year.