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Walter Energy Cuts Dividend to 1 Cent as It Amends Credit Pact

July 23 (Bloomberg) -- Walter Energy Inc., a metallurgical-coal producer, cut its quarterly dividend to 1 cent from 12.5 cents as a condition for amending a $2.73 billion credit pact.

The move was among changes to covenants agreed with lenders, the Birmingham, Alabama-based company said today in a filing.

Walter’s net senior secured leverage will rise to more than 5.5 times this quarter, the level needed to remain in compliance with the debt agreement, Benjamin Nelson, a New York-based analyst at Moody’s Investors Service, said in a June 19 report.

Second-quarter metallurgical coal output was about 2.9 million metric tons, about 7 percent more than in the preceding period, Walter said in a separate statement. Cash production costs fell more than 10 percent in the same comparison, it said. The company didn’t provide year-earlier numbers.

“The short-term outlook for global met coal pricing remains depressed,” Chief Executive Officer Walt Scheller said in the statement.

To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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