Walter Energy (WLT) Refi Troubles Tied to Weakness in High-Yield Markets
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Price: $0.16 --0%
Rating Summary:
1 Buy, 16 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 16 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Brean Capital today maintained a Hold rating on Walter Energy (NYSE: WLT). Shares declined last week after the company pulled plans to refinance its debt.
Commenting, analyst Lucas Pipes said, "The decision to withdraw the offering at this time was probably related to the recent weakness in the high-yield markets, in our opinion."
"While the company does currently not need incremental funding, we do estimate that at current met coal prices the company is at risk of tripping its covenants under the Fourth Credit Agreement at the end of Q3 2013. On this backdrop, we anticipate that the company will pursue a credit amendment in this offering's stead. We believe that the chances of Walter Energy being able to negotiate another credit agreement are very high. However, it is yet to be seen what the lenders will demand from Walter Energy (in addition to higher interest rates and fees) in exchange for the additional flexibility to the company. Unfortunately, this uncertainty will likely remain an overhang for the stock, in our opinion," added the analyst.
For an analyst ratings summary and ratings history on Walter Energy click here. For more ratings news on Walter Energy click here.
Shares of Walter Energy closed at $12.13 yesterday.
Commenting, analyst Lucas Pipes said, "The decision to withdraw the offering at this time was probably related to the recent weakness in the high-yield markets, in our opinion."
"While the company does currently not need incremental funding, we do estimate that at current met coal prices the company is at risk of tripping its covenants under the Fourth Credit Agreement at the end of Q3 2013. On this backdrop, we anticipate that the company will pursue a credit amendment in this offering's stead. We believe that the chances of Walter Energy being able to negotiate another credit agreement are very high. However, it is yet to be seen what the lenders will demand from Walter Energy (in addition to higher interest rates and fees) in exchange for the additional flexibility to the company. Unfortunately, this uncertainty will likely remain an overhang for the stock, in our opinion," added the analyst.
For an analyst ratings summary and ratings history on Walter Energy click here. For more ratings news on Walter Energy click here.
Shares of Walter Energy closed at $12.13 yesterday.
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