Coal issues stay lower amid talk Walter may file; iron ore names calm down

By Paul Deckelman

New York, July 14 – Coal mining credits continued to trade at weak levels on Tuesday, distressed-debt traders said.

They noted market scuttlebutt and news reports indicating that troubled producer Walter Energy Inc. could file for bankruptcy protection this week. But that company’s already battered bonds – trading for just pennies on the dollar – were not very active, with only small trades seen.

Traders saw more activity, at mostly lower levels, in names such as Arch Coal, Inc. and Peabody Energy Corp.

In addition to the bonds, Arch’s bank debt was seen active as well, trading at lower levels.

Iron-ore mining companies such as FMG Resources and Cliffs Natural Resources, which were getting knocked around at this time last week on lower iron-ore prices and fears of the slowing economy in China, seemed to stabilize, traders said, though at lower levels.

Oil prices rebounded during the session, coming off the early lows they had hit on investor fears that the achievement of a deal between the major powers and Iran over the latter’s nuclear power efforts would mean a quick end to economic sanctions and Iran’s return to world crude oil markets. But realization later in the day that probably won’t happen anytime soon helped crude prices.

But that rise didn’t do much, traders said, for such oil names as Linn Energy LLC and California Resources Corp.

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