Coal.....

[Ghibli]

@Black_Swan

It’s outside my area of expertise at this point. I was looking at the bonds myself after bankruptcy wondering if there was some value there but just never got around to doing a good analysis.

I’m just guessing, but probably a combination of several factors:

1. Transitioned to a new pool of investors (ie distressed / bankruptcy shops) who see an avenue towards higher recovery value and are snapping these up to build a large enough stake to drive negotiations.

2. Improving commodity values boosting underlying asset values.

There’s a huge sensitivity to coal prices here I’d imagine. If prices remain low, there are few buyers for assets and many of the mines will likely be closed at a high cash cost that will hurt recovery values. With a boost to coal prices, the outlook becomes better with more mines sold or kept in operation and a better outlook for bonds.

I’d be worried about the bonding issue, but it’s really far outside my expertise at this point.

Thanks for the response. Apparently, this particular BK is going to be drawn out and complicated. Amazing how CDSs have changed the motives of debt holders. The coal market and asset values are going to be a lot different by the time everything gets settled. And the upcoming election is going to play no small role. Should be fun. I would think the unsecureds should be hoping for a couple of years. Yeah, strict bonding requirements and/or quick resolution will not be good for those of us on the bottom.

[igor555]

coal crushing in EU

[aznxuguy]

@Ghibli

Hey BS, why have the unsecured bonds doubled since bk? Traded at 6 after going flat, now 12. I’m sure you would say look at it as a gift and run, but any insight? Seen a few theories floated, but all probably wags.

I can’t talk about the specifics but this is actually going to be one of the most brutal and most hilarious bankruptcy fights in a while. Some people really fukd up big time. If you read the 10-K and the indentures it’s reasonably possible to piece together. I saw it but kinda thought it’d be ridiculous but shit became real.

Just FYI Elliott is involved and you can figure that out pretty easily from the dockets.

[aznxuguy]

ghibli still in it?

[Ghibli]

Still in it. I averaged down so much on my unsecured Peabody that I was in the black yesterday. Back in the red today. I like to hold until the fat lady sings.

[Galli]

^ sorry man, fat lady came down with the ole black lung.

Singing days are over.

[Palantir]

@Galli

^ sorry man, fat lady came down with the ole black lung.

Singing days are over.

I see what you did there.

[aznxuguy]

these things just keep going up every day. met coal supposedly 130+ atm and thermal prices have been ticking up

[40yoCFAcandidate]

I have a child in third grade. A few weeks ago he said “when you burn coal, it creates poison gas”. I didn’t even know he knew what coal was. In the longer-term, I think this is dead. But maybe the ‘long-term’ will outlast us all, even the younger-than-me folks.