Patriot Coal bonds slump, quote flat on report of imminent Ch. 11
Patriot Coal 8.25% notes due 2018 shed eight points on press reports a bankruptcy filing is imminent, to 33/37 and quoted flat, or without accrued interest, according to sources. A Chapter 11 filing is expected as soon as today, according to a Bloomberg News report, which tied Citi, Barclays, and Bank of America to DIP financing agreements.
Last week, the bonds had traded up several points, to the low 40s, on the hope of a refinancing combined with the fact that a lot of people thought the company had more time, sources have told LCD.
Other outlets have reiterated the Bloomberg story, which is itself an update of details provided by Debtwire June 22 about potential DIP financing. Bloomberg provided no new details except for the timing of the filing, and the quote on the 8.25% has actually only returned to levels reached following the original Debtwire report.
The stock, however, plummeted 72% today, to $0.61, an all-time low since going public in 2008.
Legacy holders of the bonds had been selling off over the past month, sources had told LCD, and soon after, the news of shopping DIP financing and a possible bankruptcy in light of a potential tripped covenant came out. The company's principal accounting officer resigned June 25. – Staff reports
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