Westmoreland Raises $700 Million in Junk Debt After Yield Boost

Westmoreland Coal Co. raised $700 million in high-yield debt after sweetening terms for investors.

The coal miner sold junk bonds and a loan in equal parts with yields higher than what were originally offered, according to data compiled by Bloomberg. The borrowings refinance notes due in 2018.

Westmoreland issued $350 million of 8.75 percent senior secured bonds due 2022 at 98.708 cents on the dollar to yield 9 pecent, Bloomberg data show. The Englewood, Colorado-based company earlier marketed $400 million in notes at yield of 8.75 percent, according to a person with knowledge of the matter, who asked not to be identified because the terms aren’t public.

The company made up for the decreased bond sale by boosting its loan by the same amount. The five-year debt was sold at 97.5 cents on the dollar after failing to attract investors at 99 cents, Bloomberg data show.

The rate paid on the loan was increased to 6.5 percentage points more than the London interbank offered, compared with an initial range of 4.75 percent to 5 percent initially offered, Bloomberg data show. The lending benchmark has a one percent minimum.

Kevin Paprzycki, Westmoreland’s chief financial officer, didn’t respond to telephone calls seeking comment.

Standard & Poor’s rates the notes B, five levels below investment grade, while Moody’s Investors Service grades the loan at Caa1.

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