Replies to post #11649 on The Rising Influence of Rising Affluence

[jbog]

Rocky,

For the life of me I don't understand why they don't throw the towel in and let the debt holders have it?

Come Feb they have a mandatory convert going into the common which will only lower the common that much more.

Can they survive in their current form? Probably but why bother. It'll take a decade at least before they get their head above water but if they reorganize they actually could have a nice little company.

I don't know how much senior debt they have which must be blocking the value of all the other bonds.

It's beyond me.

[DewDiligence]

The high-yield corporate-bond market is currently in disarray, so there are apt to be many quotes that appear illogical.

[jbog]

Rocky,


Looking how Arch is dealing with their bondholders it doesn't look good for the non-secured groups:

Coal miners have been “serial filers” for Chapter 11 protection, Fitch added, thanks to “unsustainably high debt leverage from past acquisitions followed by a plunge in coal pricing.”

Fitch pointed to the company’s debt-fueled acquisitions and stagnant demand and pricing, among other factors. Also, a distressed debt exchange failed when senior-secured lenders recently blocked the move because, they said, Arch was already in default.

Junior bondholders will receive “essentially” nothing based on market prices for Arch debt, while first-lien debt owners may get less than 50 cents on the dollar. Unsecured bondholders are likely to be “wiped out” in the restructuring.

A majority of lenders have agreed on a plan to eliminate more than $4.5 billion in debt and give Arch a $275 million debtor-in-possession loan. Arch, one of the largest coal producers in the U.S., also has more than $600 million in cash on hand.

Fitch said Arch plans to continue to pay suppliers, fund retiree benefits and pay for its employee health plans.