Peabody Energy Inc. is on the junk bond market with $2.75 billion, the St. Louis, Mo.-based company said today.

The coal company plans to sell the bonds in tranches of senior notes due 2018 and 2021.

Lead bookrunner Bank of America Merrill Lynch is joined by Citigroup, HSBC, Morgan Stanley, RBS and UBS. The bonds will likely price Tuesday, according to KDP Investment Advisors.

The company will use the proceeds to finance its acquisition of Macarthur Coal Ltd. in a deal that has a total value of $4.9 billion. It will use any remaining proceeds to repay revolver debt or for general corporate purposes.

Peabody was on the market last year and issued $650 million in senior notes due 2020 in August 2010.

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