Arch Coal launches $300 million term loan B, credit facility amendment

By Sara Rosenberg

New York, Dec. 3 - Arch Coal Inc. held a call at 1:30 p.m. ET on Tuesday to launch its fungible incremental $300 million covenant-light term loan B due May 16, 2018 and amendment to its existing senior secured credit facility, according to a market source.

Bank of America Merrill Lynch is the left lead on the deal.

The incremental loan has 101 soft call protection for one year.

Proceeds will be used to help fund the redemption of the company's $600 million 8¾% senior notes due 2016.

Meanwhile, the amendment will permit the new term loan B debt, refresh the incremental allowance of $150 million, allow for the incurrence of second-lien debt up to the maximum credit facility basket under the 7¼% senior notes due 2020 and permit the replacement of the existing revolver and accounts receivables securitization facility with an ABL revolver governed by a current asset borrowing base, the source added.

With this transaction, the company's revolver will be reduced to $250 million from $350 million.

Lenders are being offered a 25 bps amendment fee.

Closing is expected this month.

Arch Coal is a St Louis-based coal producer.

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