Reuters reported BMO Capital Markets downgraded Appalachian coal producers Alpha Natural Resources Inc and Arch Coal Inc, one week after Patriot Coal filed for bankruptcy, causing their share prices to drop to $1.23/share and $5.00/share respectively.
One week after Patriot Coal filed for bankruptcy, BMO Capital Markets downgraded two other Appalachian coal producers, Alpha Natural Resources Inc (ANR.N) and Arch Coal Inc (ACI.N) and their share prices dropped.
Analyst at BMO Capital Markets, Meredith Bandy, wrote:
Expected closures in Appalachia may also exacerbate financing issues. Alpha would have to fully draw down the revolver and see a more than 10 percent decline in coal pricing to trip the covenants.