WLT has a number of liabilities, and it is important to note the following:
Term Loan A = LIBOR-based, at avg rate of 4.8%
Term Loan B = LIBOR-based at avg rate of 5.75%
450M Senior Note A due 2021 = 8.5%
500M Senior Note B due 2020 = 9.875
What WLT is trying to refinance is the TERM loans (A or B).
BK is not likely at this point, because they still have the ability to service those loans.
Joeltay-Your emails are very helpful. I compared your comments about met coal pricing and adjusted ebitda with what WLT said about the same issues on May 1st when they reported 1st quarter earnings. The HCC sold on average for $152 a ton. Their cash cost per ton is going down so even at current low spot prices they should still have a margin to allow adjusted ebitda to improve.I assume they have many long term supply contracts at prices set in the past and do not sell all their current output at spot market prices.Things are tough in the coal business without a doubt. But I personally do not see a company survival issue here. Thanks again for your helpful input.
For the term loan, since it is Libor-based, there is no way we know what it will be in the next few years. If interest remain low in the enviroment, it will be about what they are getting now. It could shoot to 13% if LIBOR starts going up.
For the senior notes, the interest is fixed, payable to the bondholder every 6 months.