Couple Comments on Metallurgical Coal Credits
UBS on coal miners:
"In our view, Alpha, Arch, and Walter may not be good Chapter 11 restructuring candidates since debt comprises most of the long term liability pie. There may be limited ability to shed other liabilities through a restructuring process. Hence, it may make more sense for unsecured bondholders to do exchange offers or agree to other concessions out of bankruptcy. That said, companies with a larger amount of secured debt, like Walter, may be more inclined to go through a Chapter 11 process in anticipation of higher recoveries."Moody's on met coal:
"At these prices, all Moody's-rated US met coal producers will continue to be stressed, with those that acquired met-coal assets at the height of the market labouring under very high leverage."Sounds like WLT.
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