The bank debt of Horizon Natural Resources, formerly known as AEI Resources, traded last week. Small pieces changed hands in the high 20s almost a week after the company filed for bankruptcy on Nov. 13, said a trader. This is the second time this year the company has filed for bankruptcy. Last week, traders quoted the paper as low as 25-28. In a written statement, Horizon Natural Resources claimed its liquidity crisis was caused by weak demand in the coal industry, increased inventories, and an uncompetitive capital structure. Michael Nemser, cfo, did not return calls by press time. The company has secured a $350 million debtor-in-possession facility from Deutsche Bank.
Almost two months ago, Horizon Natural Resources revised its EBITDA forecast by $60-70 million, making covenant compliance questionable. At that time, the bank debt was said to have traded in the mid-to-high 50s (LMW, 9/30). The company emerged from a pre-packaged bankruptcy for the first time this year in May, changing its name from AEI to Horizon.