"Arch Coal Lenders Balk at Bond Deal"

"Arch Coal Inc. is under mounting pressure to get a grip on its dwindling cash. The miner is saddled with $5.1 billion of debt and has failed to clinch a deal with creditors to swap existing bonds for new securities with longer maturities, which would help the company cut its obligations and ride out a commodities slump. Now Arch is three weeks away from an $18.1 million interest payment on some of the bonds it wants to make disappear. With the company’s senior lenders not wanting to see that cash used up, they’re likely to pressure the company to skip the payment..."

Apparently, unsecured creditors have agreed to a deal with the company to swap their notes for a lower face amount of secured debt, BUT the existing secured lenders are refusing to consent because more debt pari passu with them would lower their recoveries.

The senior lenders want that deal blocked, and they want the company to stop making payments on unsecured debt.