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Stock Market & Financial Investment News

News Breaks
June 30, 2014
07:50 EDTWLTS&P lowers Walter Energy rating to 'CCC+' with negative outlook
Standard & Poor's Ratings Services said late Friday that it lowered its corporate credit rating on Walter Energy to "CCC+" from "B-". "We lowered the ratings on the company's senior secured credit facilities and 9.5% senior secured first-lien notes to 'B-' from 'B'. The recovery rating on the debt remains '2', indicating our expectation of substantial recovery in the event of a payment default...The negative outlook reflects our expectation that weak met coal market conditions will persist, which will pressure the company's liquidity position. We also expect very weak credit measures in 2014, with debt leverage above 20x and EBITDA interest coverage of less than 1x in 2014," said Standard & Poor's.
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July 11, 2014
12:51 EDTWLTWalter Energy volatility low into Q2
Walter Energy July call option implied volatility is at 63, August is at 71, and December is at 70; compared to its 26-week average of 74 according to Track Data, suggesting decreasing price movement into the expected release of Q2 results on July 31.
July 8, 2014
11:38 EDTWLTCoal producers retreat after Morgan Stanley lowers price forecast
Shares of some coal producers are falling after Morgan Stanley reduced its price targets on several names in the sector. WHAT'S NEW: Morgan Stanley analyst Evan Kurtz warned that metallurgical coal prices may rebound more slowly than the firm had previously expected. The firm's commodity forecasters reduced their outlook for met coal prices to $133 from $160 per ton in 2015, Kurtz reported. Chinese imports have been weak so far this year, as exports to that country from Australia have risen, the analyst explained. However, production cuts should still help prices rise next year, Kurtz stated. Nonetheless, he cut his price target on Walter Energy (WLT) to $16 from $26, on Alpha Natural (ANR) to $4 from $5 and on Arch Coal (ACI) to $2 from $3. He kept an Overweight rating on Walter Energy, an Equal Weight rating on Alpha Natural and an Underweight rating on Arch Coal. COMPANY NEWS: In addition to the analyst opinion, two of the companies in the sector, Walter Energy and Westmoreland Coal (WLB), announced news this morning. Walter Energy announced that it has commenced a private offering of $320M aggregate principal amount of 9.5% senior secured notes due 2019. Walter also disclosed in a regulatory filing earlier that its preliminary metallurgical coal production for Q2, including both hard coking coal and low-volatility pulverized coal injection product, was 2.5M metric tons, and that its preliminary metallurgical coal sales for Q2 was 2.7M metric tons. Additionally, Walter noted that it incurred severance charges of approximately $7M in Q2 in connection with the idling of its mines in Canada. For its part, Westmoreland disclosed in a regulatory filing that the company currently anticipates reporting adjusted EBITDA in the range of $35M-$38M for the three months ended June 30. WHAT'S NOTABLE: On June 20, another research firm, Sterne Agee, recommended that risk-tolerant investors buy Alpha Natural. The firm predicted that the company would benefit from normalizing thermal and metallurgical coal prices. According to Sterne Agee, the market was underestimating several of Alpha Natural's positive catalysts. PRICE ACTION: In late morning trading, Walter Energy sank 5.4% to $5.82, Alpha Natural gave back 7.2% to $3.37, Arch Coal retreated 5.2% to $3.22, and Westmoreland sank 5% to $34.97.
09:44 EDTWLTWalter Energy reports preliminary Q2 metallurgical coal production 2.5M mt
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09:15 EDTWLTOn The Fly: Pre-market Movers
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08:09 EDTWLTCoal secotr estimates lowered at Morgan Stanley
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