Wall Street analysts see bankruptcy risk rising for some well-known coal producers.
“Chapter 11 risks rising for both Arch and Peabody After the failed debt exchange, Arch is in talks with creditors for a possible restructuring as it highlighted in its Q3 earnings release. It has $90mn in coupon payments due on 15th Dec which could trigger a chapter 11 filing in our opinion. Peabody bought itself time with its recent asset sale of three western bituminous mines for $358mn in cash but we continue to feel that with the outlook for both coal and gas uninspiring for next year, we feel, Peabody may still have to restructure. The two upcoming triggers are the large ~$70mn coupon payment due in March and a state review of its qualifications to self bond its Wyoming AROs in Q2’16,” according to a JP Morgan note posted by Ben Levisohn of Barron’s.
Market Vectors-Coal ETF