Their filing today:
Peabody Energy Corporation (“Peabody”) continues to address the challenges of the current environment with a continued focus on the operational, organizational, portfolio and financial areas of the business. Within the financial area, Peabody has dual financial objectives of optimizing liquidity and deleveraging. The company continues to evaluate ways to balance these objectives, including potential debt exchanges and buybacks. In connection with this evaluation, Peabody has entered into non-disclosure agreements with certain holders of its outstanding indebtedness concerning potential interests in issuing new debt instruments (the “Transaction Discussions”). Pursuant to the non-disclosure agreements, Peabody has agreed to publicly disclose certain confidential information related to the Transaction Discussions. The Transaction Discussions involved Peabody’s potential interest in raising $150 million in debt financing secured by certain of its Australian assets and a $250 million secured letter of credit facility through subsidiaries that do not guarantee Peabody’s debt. No agreement has been reached in connection with the Transaction Discussions.The 6% notes due 2018 trade below 17 cents on the dollar - a yield to maturity over 90%. There's $1.5 billion of them outstanding, with a market value of $249 million now. I don't know why anyone owns the stock, or why the company isn't more aggressive about exchanging stock for debt.
The Transaction Discussions also included disclosure of ongoing discussions with certain holders of its 6.00% Senior Notes due 2018 (the “2018 Notes”) regarding potential instruments and related structures that could be used to effect exchanges for other securities of Peabody and/or or its subsidiaries.
Peabody expects to continue to have discussions with holders of our outstanding indebtedness. The company’s primary objectives in these discussions is to optimize liquidity, reduce leverage, lower interest expense and extend maturities while taking into account considerations such as timing, tax impact and other factors.