NEW YORK (TheStreet) -- Walter Energy (WLT) was gaining 4.4% to $9.41 Wednesday after the company announced private offerings of $100 million 9.500% senior secured notes and $350 million senior secured second lien PIK toggle notes.
The senior secured notes are due 2019, while the senior secured second lien PIK toggle notes are due 2020. The notes will be guaranteed by all of Walter Energy's current and future subsidiaries.
The company plans to use the proceeds from the offering to repay its term loan A under its credit facility in full. The proceeds will also go towards increasing liquidity and paying any related fees and expenses.
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TheStreet Ratings team rates WALTER ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate WALTER ENERGY INC (WLT) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows: