NEW YORK (TheStreet) -- Shares of Cloud Peak Energy (CLD) were falling 10.1% to $11.28 Wednesday after the mining company announced a public offering of $100 million of mandatory convertible preferred stock.
Cloud Peak Energy announced it will offer 100,000 shares of its Series A mandatory convertible preferred stock with a liquidation preference of $1,000 a share. The company said it will grant the underwriters of the offering a 30-day option to buy an additional 15,000 additional shares to cover any over-allotments.
The company plans to use the net proceeds from the offering to pay for part of its outstanding 8.5% senior notes due in 2019. If the underwriters exercise their option Cloud Peak Energy will use the remaining proceeds for general corporate purposes.
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TheStreet Ratings team rates CLOUD PEAK ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CLOUD PEAK ENERGY INC (CLD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself."