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Trading Opportunities-Let's Roll with Coal

 

 

 

Arch Coal

Arch Coal is the second largest coal producer in the U.S. Arch Coal was formed in 1997 through the merger of Ashland Coal and a private company, Arch Minerals Corporation. Since then Arch Coal has continued to grow especially in the Powder River Basin. Arch Coal operates 32 mines and has 5.5 billion tons of coal reserves.

 

Alpha Natural Resources, Inc.

Alpha was formed in 2004 through the acquisition of the Brinks Company coal business and Coastal Coal Company. In 2011 Alpha agreed to buy Massey Energy for $7 billion. The company operates 81 mines and has 4.3 billion tons of reserves.

 

Trading Opportunities for High Yield Junk Bond Investors Willing to Speculate on "Catching a Bottom"

 

Arch Coal 7's due 6/15/19, approx price 70, current yield 10 %, YTM 16.21%

Arch Coal 7 1/4 due 10/1/20, approx price 69, current yield 10.05 %, YTM 15.22 %

Arch Coal 7 1/4 due 6/15/21, approx price 68, current yield 10.7 %, YTM 14.88 %

Alpha Natural 6 1/4 due 6/1/21, approx price 69, current yield 9.1 %, YTM 13.34 %

 

Performance Plus Advisors, Inc. provides research on distressed debt securities and high yield junk bonds. If interested in our high yield suggestions give us an email.

 

Stephen P. Vlahos

 

 

 

Patriot Coal Exits Chapter 11 Bankruptcy

 

Patriot Coal Plan of Reorganization

The Patriot Coal Plan of Reorganization allows for a private stock distribution in the newly formed Patriot Coal as it exits Chapter 11 Bankruptcy, expected by year end 2013.

Initially holders of the 8 1/4's will receive 60% of the common and after a Rights Offering holders will own 92.3%.

The aggregate subscription price for the Payment In Kind Notes will be $250 million. The Backstop Parties (Knighthead) will be offered rights to purchase up to 40% of the Rights Offering Notes and up to 40% of the Rights Offering Warrants. These warrants will exercise at 1 cent. Then the Senior Note Claim ($250m) will represent 92.3% of the common stock.

Other holders excluding the Backstop Parties will participate in remaining notes and warrants.

Convertible debt, (the 3 1/14's) and general unsecured  will participate marginally.

Shares will be delivered to a Voting Trust.

Shares will not be trading.

I guess you will need to sell your common stock on EBAY?

 

Stephen P. Vlahos

Related articles

Patriot Coal Receives Court Authorization To Solicit Creditor Approval For Plan Of Reorganization

Let's Roll with Coal

 

                                                                  Let's Roll With Coal

 

                                                                    Investment Opportunities

Patriot Coal Corporation (Chapter 11 Bankruptcy) $250M    8 1/4 due 4/30/18          price 48

Distressed debt investors should consider what the recovery will be on this bankruptcy claim.

                                                                    Trading Opportunities

For Hi yield junk investors willing to follow these issues and speculate on catching a bottom: 

Arch Coal $1Billion                         7 1/4 due 6/15/21        price 83 current yield: 8.7% YTM: 10.45%

Arch Coal  $500 Million                7 1/4 due 10/1/20         price 81 current yield: 8.95% YTM: 10.90%

Arch Coal  $1Billion                        7  due 6/15/19              price 82 current yield: 8.84% YTM: 11.22%

Alpha Natural $700 Million           6 1/4 due 6/1/21           price 83 current yield: 7.5% YTM: 9.34%

Alpha Natural $800 Million           6 due 6/1/19                  price 81  current yield: 7.4% YTM: 10.39%

 

Performance Plus Advisors, Inc. provides research on distressed debt securities. If interested in a research report on Patriot Coal or any other company we follow just give us a call or email us.

727-441-1305 ext 201

 

Stephen P. Vlahos 

 

Distressed Debt Research-Patriot Coal

 

                        Patriot Coal Corporation

 

Patriot Coal Corporation filed for Chapter 11 Bankruptcy protection on July 9, 2012. Patriot Coal is a producer of thermal  and metallurical coal, with operations and reserves in the Appalachia and the Illinois Basin coal regions. In 2011 the Company sold 31.1 million tons of coal. Patriot Coal was spun off from Peabody Energy Corp in 2007. In 2008, Patriot Coal acquired Magnum Coal which was spun off from Arch Coal Company.

Coal Demand

Global demand for coal is expected to grow to 9 billion tons by 2016 from 8 billion in 2012, much of the demand coming from China and India. In the United states coal demand is falling. In 2010 there were 522 coal burning plants in the United States, there are now 395. Last year about one third of US electricity came from coal, down from 49 % in 2008. The higher carbon efficiency of natural gas generation has reduced the demand for coal and increased natural gas consumption. Cheap natural gas. The Environmental Protection Agency has enacted rules that will require coal fired power plants to curb pollution. Some utilities are moth balling older coal plants rather than installing expensive scrubbers.

 

Patriot's DIP Facility ($800 Million)

First Out Revolving Credit Loan ($125 M)

First Out Term Loan ($375 M)

Roll Up ($300 M)

 

Patriot's Tradeable Debt

8 1/4 % Senior Notes due 2018 ($250 M)                        price  49

3 1/4 % Convertible Senior Notes due 2013 ($250 M)      price  12

 

Stephen P Vlahos

 

If interested in research on Patriot Coal or any other company we follow please feel free to contact us.

 

 

 

 

 

Related articles

Patriot Coal: A Bankruptcy Where Company is Technically Solvent

Labor Agreements Ratified, Paving The Way For Patriot Coal Emergence From Bankruptcy

Court dismisses union's lawsuit vs. Arch, Peabody

Patriot Coal files reorganization plan