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Arch Coal Launches $250 Million Secured Term Loan

November 13, 2012, 07:56 AM
Filed Under: Energy
Related: Term Loan

Arch Coal launched a $250 million incremental, senior secured term loan due 2018, pursuant to an uncommitted accordion provision in the company's existing revolving credit agreement. Completion of the new term loan offering would reduce the size of the company's revolving credit facility to $350 million from $600 million. Concurrent with the term loan offering, Arch announced that it has commenced a private offering of $350 million in senior unsecured notes due 2019.

Arch intends to use the net proceeds from the offering of the senior notes and the term loan for general corporate purposes. Upon completion of these efforts, Arch expects to have a cash and marketable securities balance in excess of $1.2 billion.

Separately, Arch plans to seek certain amendments to its secured revolving credit facility to provide additional flexibility under the financial covenants that govern that facility. The completion of the offering of senior notes by Arch is not conditioned upon the success of amending the revolving credit facility, nor are any consents required to complete the offering.

The term loan is secured and guaranteed by substantially all subsidiaries of Arch Coal, Inc., consistent with the existing term loan and revolving credit facility. The new term loan also is not expected to carry any financial maintenance covenants, similar to the existing term loan.

U.S.-based Arch Coal is one of top five global coal producer and marketer.

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