Arch Coal Completes Senior Note and Term Loan Offerings, Amends Credit
ST. LOUIS, Nov. 21, 2012
ST. LOUIS, Nov. 21, 2012 /PRNewswire/ -- Arch Coal, Inc. (NYSE: ACI) today
closed on its previously announced $375 million senior unsecured notes and
$250 million incremental secured term loan. Under the terms of the credit
agreement, the $250 million incremental term loan will reduce the size of
Arch's revolving credit facility to $350 million from $600 million. The
company intends to use the net proceeds from these financings for general
corporate purposes. Following these transactions, Arch has cash and
investments of $1.2 billion and total available liquidity of approximately
$1.4 billion, on a pro forma basis as of Sept. 30.
Separately, Arch successfully amended its senior secured revolving credit
facility, relaxing the financial maintenance covenants until Dec. 31, 2015.
Among other revisions, Arch must adhere to a minimum liquidity covenant that
requires the company to maintain available liquidity of at least $450 million
through Dec. 30, 2015.
"Arch's recent financing efforts enhance our cash and liquidity position and
eliminate potentially restrictive financial covenants, providing us with
greater financial flexibility in case industry headwinds persist longer than
anticipated," said John T. Drexler, Arch's senior vice president and chief
financial officer. "This comprehensive financing plan also provides Arch with
tools to de-lever when coal markets recover. While our leverage is currently
above our long-term targeted range, we have no major debt maturities until
2016 and 45 percent of our outstanding debt will be pre-payable or callable
within the next year."
The incremental term loan will carry an interest rate of LIBOR plus 4.50
percent initially, subject to a LIBOR floor of 1.25 percent. The interest
rate on the incremental term loan can step down to LIBOR plus 4.25 percent
after 12 months from the original term loan issuance date, subject to certain
conditions. The incremental term loan was priced at 99 percent of par,
resulting in a 6 percent annual yield.
The senior notes have been offered only to qualified institutional buyers in
reliance on Rule144A under the Securities Act of 1933, as amended (the
"Securities Act"), and to non-U.S. persons in transactions outside the United
States in reliance on Regulation S under the Securities Act.
This press release is neither an offer to sell nor a solicitation of an offer
to sell or a solicitation of an offer to buy any securities. The senior notes
have not been registered under the Securities Act or any state securities laws
and may not be offered or sold in the United States absent registration or
applicable exemption from registration requirements.
U.S.-based Arch Coal is a top five global coal producer and marketer. Arch is
the most diversified American coal company, with mining complexes across every
major U.S. coal supply basin. Its core business is supplying cleaner-burning,
low-sulfur thermal and metallurgical coal to power generators and steel
manufacturers on five continents.
Forward-Looking Statements: This press release contains "forward-looking
statements" — that is, statements related to future, not past, events. In
this context, forward-looking statements often address our expected future
business and financial performance, and often contain words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," or "will."
Forward-looking statements by their nature address matters that are, to
different degrees, uncertain. For us, particular uncertainties arise from
changes in the demand for our coal by the domestic electric generation
industry; from legislation and regulations relating to the Clean Air Act and
other environmental initiatives; from operational, geological, permit, labor
and weather-related factors; from fluctuations in the amount of cash we
generate from operations; from future integration of acquired businesses; and
from numerous other matters of national, regional and global scale, including
those of a political, economic, business, competitive or regulatory nature.
These uncertainties may cause our actual future results to be materially
different than those expressed in our forward-looking statements. We do not
undertake to update our forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by law.
For a description of some of the risks and uncertainties that may affect our
future results, you should see the risk factors described from time to time in
the reports we file with the Securities and Exchange Commission.
SOURCE Arch Coal, Inc.
Contact: Media, Kim Link, +1-314-994-2936, or Investors, Jennifer Beatty,
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