Wednesday, July 29, 2015

Peabody Energy Conference Call Q2 2015

Q - Matthew Fields: Okay. Thanks very much. And then one follow-up, just sort of where bond prices, with where they are, what they are in the $0.20, $0.30 on the dollar. Are you planning to be buying these up in the open market?

A - Amy B. Schwetz: So I would say that given both our equity and our bonds are publicly traded, you can probably appreciate that we can't comment on specific strategies. Our objective is always to preserve and enhance the company's value. And at this point in time, we really think that's done by focusing on our areas of emphasis. And particularly in the area of financial strength you'll see that our current near-term goal is to maximize liquidity and reduce leverage over time.

Q - Matthew Fields: Okay. And then just sort of on the back of that, if you're not going to be buying bonds back in the open market, I guess a good way to take advantage of the discount to in fact delever would be to exchange based on current prices. And your sort of first-lien capacity you could do quite a lot it seems, especially with the $1.5 billion 2018 maturity looming. Can you talk about that and your sort of appetite and outlook for how to deal with that maturity, please?

A - Amy B. Schwetz: I guess as it relates, again, we're not going to get into the specific strategies as it relates to our debt or equity at this point in time. The 2018 maturity is about three years away, so we feel like we have plenty of runway to deal with that as the date approaches.

Q - Matthew Fields: Okay. Thanks very much

So it sounds like they are too dumb to take advantage of debt trading at 10 cents, and they'll just hope that coal prices will bounce back.


Nemo Incognito said...

Alternately - if you were going to try to buy back a cheeky 500mm of debt on market would you advertise that? NFW they buy at 30 if they tell the market that is what they are trying to do.

CP said...

Walter Energy was too dumb to deleverage only a year ago when its stock was above $6

CP said...

There's $732 million of the BTU subordinated note outstanding, trading at about 10 cents (market value $73 million).

They still have a market cap of $330 million despite the $659 "hole" in the sub notes (not to mention the unsecured debt). They ought to exchange stock for debt.

CP said...


"Here's the chart of copper, for example; as you can see, the current decline has taken it to where it bottomed in 2006/07. (Incidentally, a break of this level would look pretty ugly from a technical perspective, with plenty of fresh air between here and a 50% decline.)"