August 24, 2017 Read More →

$1.1 Billion in Bonds of Marquee U.S. Coal Company Plunge in Value

Bloomberg News:

Bonds of Murray Energy Corp., the biggest privately owned U.S. coal producer, fell the most in 15 months after the White House denied the company’s request to aid one of its power-plant customers, an action it said would help both companies avoid bankruptcy.

The miner’s $1.1 billion of 11.25 percent bonds due in 2021 fell 7 cents on the dollar on Wednesday and were quoted at 61 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. It was the biggest decliner and the most actively traded security in the U.S. corporate-bond market, the data show.

The plunge came as President Donald Trump’s administration rejected Murray’s request to keep the coal-fired power plants of FirstEnergy Solutions Corp. operating by invoking emergency authorities under the Federal Power Act. The same bonds had surged last year in part on Trump’s election as the Republican vowed to revive America’s coal industry. The securities exceeded 83 cents on the dollar as recently as February.

Robert E. Murray, the company’s chief executive officer and an early backer of Trump, said in a letter earlier this month that he was present when the president expressed support for the company’s plea and directed Energy Secretary Rick Perry to get it done.

Murray Energy has debt payments of $44.4 million due at the end of September, another $59.4 million on Oct. 17 and $44.3 million at the end of the year, Murray’s Chief Financial Officer Robert D. Moore wrote in an Aug. 18 letter to Perry.

Murray, a closely held company, produces about 65 million tons of the fossil fuel a year, according to the company’s website. It primarily operates in the country’s Northern Appalachian and Illinois coal basins and sells its coal to power plants operated by companies including FirstEnergy.

More: Coal Miner Murray’s Bonds Drop After Trump White House Snub

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