Arch Coal Completes Senior Note and Term Loan Offerings, Amends
Credit Facility
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.
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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 Rule 144A 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.