Peabody Energy +25% as lenders reportedly hire firm for debt discussions
Peabody Energy (BTU +25.4%) is surging following a Bloomberg report that a group of the company's senior lenders hired New York-based law firm Davis Polk & Wardwell in anticipation of talks to restructure its $6.3B in debt.The creditors hold BTU's $1.17B first-lien term loan and are concerned that any proposal by BTU could dilute the value of the assets that secure the debt.The news suggests BTU is serious about de-leveraging, and that such a move has the potential to wipe out some of the value of its outstanding debt.Arch Coal's (ACI +38.6%) agreement to extend its debt exchange plan for another month, seen as a potential benchmark for a debt swap by BTU, also is helping shares.