Walter Energy rises on debt-for-stock swap, takes sector along; TXU yet to file for bankruptcy

By Stephanie N. Rotondo

Phoenix, April 28 - In the distressed debt market, the coal sector was getting a boost on Monday.

In particular, Walter Energy Inc. bonds got a decent-sized boost during the session, following the completion of the company's $35 million buyback of its 9 7/8% notes due 2020 on Friday.

The 9 7/8% notes were up 3½ points on the day, according to a trader who saw the issue close at 67. The 8½% notes due 2021 were meantime up 1¾ points at 62.

The Birmingham, Ala.-based coal producer said in a regulatory filing on Friday that it had wrapped the debt repurchase. The company bought the bonds from one noteholder. In exchange, the noteholder received 3.15 million shares of common stock.

Walter Energy is also expected to release earnings on Thursday.

Elsewhere in the coal space, Arch Coal Inc.'s 7¼% notes due 2020 were up "around half a point," a trader said at 763/4.

Alpha Natural Resources Inc. was also higher, its 6¼% notes due 2021 rising a touch to 74 3/8, the trader said.

Another market source placed the issue at 74½ bid, up half a point.

But of that arena, Mongolian Mining Corp.'s 8 7/8% notes due 2017 were the day's big winner, as a trader saw the debt jumping 6½ points - in just a single trade, he said - to 641/2.

Clock ticking for TXU

Energy Future Holdings Corp. has yet to file for bankruptcy, but the company was reportedly meeting Monday afternoon to go over again the plans on the table.

The Houston-based power producer has until May 1 to file for Chapter 11 protections. At that point, it will be considered in default - it missed a payment on its 15% notes due 2020 linked to Texas Competitive Electric Holdings Co. LLC - which could then trigger accelerated payments on other outstanding debt.

The company's bonds weren't much traded during Monday's session, but a trader said the 6½% notes due 2021 fell half a point to 33.

Caesars, NII trade down

Among typical go-to distressed names, Caesars Entertainment Corp.'s 10% notes due 2018 were off over half a point at 46, a trader said.

Most of the Las Vegas-based casino operator's debt was trading down during the session. The 10% notes due 2015 were off the most, losing 1¼ points to end around 93.

The company reports earnings May 7.

Meanwhile, NII Holdings Inc.'s bonds were in retreat on Monday.

The 10% notes due 2016 fell 1½ points to 39, while the 7 5/8% notes due 2021 dipped just slightly to 301/2.

NII Holdings is a Reston, Va.-based provider of Nextel Mobile phone service in Mexico and Latin America.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.