The second-lien notes issue will mature in 2022 with Peabody aiming to use $650 million to buyout 2016-due company senior notes.
“The second-lien offering is part of a series of steps taken by the company, including slashing dividends and loosening covenants, to withstand the coal market plunge,”Bloomberg commented.
“A successful deal will mean Peabody’s next significant debt maturity won’t be until 2018, according to data compiled by Bloomberg. It will also allow the company to increase its cash stockpile by about $285 million, according to (Bloomberg Intelligence analyst Spencer) Cutter.”
The debt tinkering effort follows recent credit rating downgrades for Peabody’s corporate debt by Moody’s Investors Service.
