Arch Coal improves as loss narrows; Peabody inches up as top executives slash salaries

By Stephanie N. Rotondo

Phoenix, April 21 – Distressed debt investors were focusing on Arch Coal Inc. on Tuesday after the coal producer reported a narrower first-quarter loss.

One trader deemed the 7% notes due 2019 as “active,” seeing the issue rising over 1½ points to 23 5/8.

The trader also saw the 8% notes due 2019 at 43, which he said was off almost a point.

Another trader said Arch bonds “traded up 1½ to 2 points,” placing the 7% notes in a 23½ to 24 context.

For the recently ended quarter, Arch reported a net loss of $113.2 million, or 53 cents per share. That compared to a loss of $124.1 million, or 59 cents per share, the year before.

Elsewhere in the coal market, Peabody Energy Corp.’s debt got a slight boost on news the company’s top executives are taking pay cuts to deal with the struggles within the industry.

A trader saw the 6¼% notes due 2021 closing up a quarter-point at 61½. Another market source called the 6½% notes due 2020 1¼ points better at 63¼ bid.

A third trader saw the 10% notes due 2022 in an 85 to 85½ zip code, while the 6% notes due 2018 ended at 76 bid, 76½ offered.

“The bonds were up a touch,” the third trader said.

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