Who Might Be Next in Parade of U.S. Coal Bankruptcies?

first_img FacebookTwitterLinkedInEmailPrint分享Dan Lowry for SNL:In a fall that has been swift and unyielding, four major U.S. coal producers that once had a combined market capitalization exceeding $40 billion have landed in bankruptcy within the past year.Coal companies that have managed to remain solvent are now struggling to avoid the same fate, but investors are increasingly focused on the sustainability of these producers’ capital structures amid persistently weak coal markets that are making it difficult to generate cash and service heavy debt loads. The question on many observers’ minds is: Which company will go bankrupt next?According to an S&P Capital IQ proprietary probability of default model, Illinois Basin coal producer Foresight Energy LP and mineral reserve landowner Natural Resource Partners LP, which leases coal reserves to Foresight, are among those with the greatest chance of default.Foresight’s probability of default has dropped considerably since it reached an agreement April 18 with creditors over a dispute that alleviated some bankruptcy risk. The partnership had warned that without a deal, it could be forced to seek bankruptcy protection. Foresight still needs the majority of certain bondholders to sign off on the deal by May 6.U.S. coal giant Peabody Energy Corp. had a 30% market signal probability of default on April 12, the day before its bankruptcy filing, according to S&P Capital IQ data. As of April 19, Foresight’s probability was nearly 17% and NRP’s was 13%. Appalachian producer Rhino Resource Partners LP’s probability stands at nearly 10%.Full article: As major coal bankruptcies pile up, anticipation mounts over who is next Who Might Be Next in Parade of U.S. Coal Bankruptcies?last_img

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