Walter Energy cancels proposed debt financing

Walter Energy cancels proposed debt refinancing, and shares tumble to four-year low

Associated Press

BIRMINGHAM, Ala. (AP) -- Coal miner Walter Energy Inc., said Friday it will not proceed with moves announced last week to refinance some of its debt.

The company's shares tumbled to their lowest price since December 2008 on reports that the refinancing would not happen, before trading was halted, pending news, at around 2 p.m. Despite having two hours shaved from the session, more than three times the average number of shares traded changed hands.

After the markets closed, Walter Energy said that it does not have any material debt principal payments due until 2015 and has no additional funding needs right now. The company said the proposed refinancing would not have raised additional capital.

In March, Walter Energy sold $450 million in senior notes due in 2021 at an interest rate of 8.5 percent. It disclosed June 5 that it was exploring options to refinance part of its debt "to increase its financial flexibility."

Forbes reported during the day that the company withdrew a proposed $1.55 billion refinancing because of market conditions. Forbes' story cited unnamed sources.

Writing in response to that report, Sterne Agee analyst Michael Dudas said several other public and private companies have made similar moves because of volatility in the debt and loan markets in May and June. Dudas said the company has about $2.6 billion in debt and access to about $536 million in liquidity.

Walter Energy shares fell $2.56, or 17.4 percent, to $12.13 Friday and reached a four-year low of $11.76 during the day.

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