US coal producers announce note offerings
TORONTO (miningweekly.com) – US coal producer Arch Coal on Thursday announced a private offering of $300-million in senior secured, second-lien notes due in 2019, the proceeds of which would be used together with the net proceeds of a Term Loan B facility and cash on hand, to buy back its outstanding 8.75% senior notes due in 2016 and to redeem any of the outstanding 2016 notes.
The 2019 notes would be secured on a second-priority basis, subject to certain exceptions and permitted liens, by Arch’s and its subsidiaries’ assets.
The 2019 notes would be offered only to qualified institutional buyers and to non-US persons in transactions outside the US. The offering was subject to market and other customary conditions.
Meanwhile, rival Alpha Natural Resources on Wednesday announced that it intended to offer, subject to market and other conditions, $250-million in convertible senior notes due 2020, in an underwritten public offering.
Under certain circumstances and during certain periods the notes would be convertible into cash, Alpha's common stock or a combination thereof, at Alpha's election, and would be guaranteed on a senior unsecured basis by each of Alpha's current and future wholly owned domestic subsidiaries that guaranteed Alpha's obligations under its 9.75% senior notes due 2018.
Alpha said it intended to grant the underwriters an over-allotment option to buy up to a total of $37.5-million of additional notes on the same terms and conditions.
Alpha intended to use the net proceeds to fund purchases or repayments of a portion of its and its subsidiaries' outstanding indebtedness that would mature earlier than the notes.
Any remaining proceeds from this offering, including if the purchases or repayments were not consummated, would be used for general corporate purposes.
Barclays Capital was acting as one of the book-running managers in connection with this offering.
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