Peabody Energy improves on asset sale chatter, coal better overall; Caesars bonds move up

By Stephanie N. Rotondo

Phoenix, June 19 – The distressed coal space – Peabody Energy Corp. in particular – continued to gain strength as the week came to a close.

For its part, Peabody Energy bonds improved on reports the company was planning to sell most of its assets in Queensland, Australia.

The potential sale is part of the company’s plan to divest its Australian assets. Even though said mines are cheaper to operate, they also produce lesser quality product.

But the sale could be an uphill battle. There are several assets in the area currently for sale, according to one market source, and not too many interested buyers. However, very few are considered distressed assets, which could work in Peabody’s favor.

Elsewhere in the coal arena, things were just as firm.

A trader said Alpha Natural Resources Inc.’s 6¼% notes due 2021 ended up nearly a point at 10¼.

The trader also said Arch Coal Inc. paper was better.

Caesars Entertainment Corp. and its bankrupt unit, Caesars Entertainment Operating Co. Inc., saw its bonds finishing mostly better Friday, following the trend of the broader market.

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