Will Arch Coal go bankrupt?
No coal companies went bankrupt during the week ended August 14, which is a headline due to the pressure that American coal producers are facing. However, Arch Coal (ACI) may be the next in line.
After rising to as high as $2.13 in the middle of the week on Wednesday, August 12, Arch Coal (ACI) ended the week of August 14 at $1.26 after a report from Fitch Ratings warned that default rates for the metal and mining sector could jump if ACI files for bankruptcy. The stock was up by 2.3% from August 7’s close of $1.23.
ACI offered debt exchange to its current bondholders to avoid default. The company extended the offer deadline for the second time on August 17.
Coal ETF drops marginally
The VanEck Vectors Coal ETF (KOL) was down 0.1% during the week ended August 14, and it ended at $9.34 on August 14. During the same week, the broad-based SPDR S&P 500 ETF (SPY) was up 0.7%. American coal companies make up 30% of KOL’s total holdings. Most American coal companies recovered from the slump in the week of August 7.
Cloud Peak Energy (CLD) was one of the biggest losers in the sector during the week ended August 7. But it emerged as the top gainer last week. The stock gained 16.5% to end the week at $3.04. In a separate development on August 14, Cloud Peak Energy (CLD) announced that the company has joined SSA Marine as a partner in the Gateway Pacific Terminal project in Washington State.
Natural Resource Partners (NRP) gained 10.2% during the week ended August 14 to end it at $2.80 with a market capitalization of $342.4 million.