Peabody Energy misses coupon, warns about future; Linn, Energy XXI also skip coupons

By Stephanie N. Rotondo

Seattle, March 16 – Skipped coupon payments remained a driver of distressed bonds on Wednesday.

Peabody Energy Corp. announced it was electing to use its 30-day grace period on $71.1 million in interest due on its 6½% notes due 2020 and 10% second-lien notes due 2022.

The St. Louis-based coal producer also said its ability to continue as a going concern was in question.

But given that the bonds started trading flat – or without accrued interest – they did get a little boost on the day.

A trader saw the 6% notes due 2018 – an issue the company has been trying to launch an exchange offer for – jumping 3½ points to 6 7/8. The 6¼% notes due 2021 meantime edged up a quarter-point to 6½.

Meanwhile, Linn Energy LLC’s 7¾% notes due 2021 – an issue that had a $30 million coupon come due on Tuesday – inched up another half a point to 11 1/8, according to a trader.

On Tuesday, the Houston-based oil and gas producer said that along with the skipped payment on the 7¾% notes, it also skipped a $12 million payment on its 6½% notes due 2021 and another $18 million payment on Berry Petroleum Co. Inc.’s 6 3/8% senior notes due 2022.

Energy XXI Ltd. was another one that missed an interest payment on Tuesday.

Payments were due on the 11% second-lien notes due 2020 and the 6 7/8% notes.

In midweek trading, a trader saw the 11% notes at 12¾, up a quarter-point.

© 2015 Prospect News.
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