Consol Mining launches $800 million credit facilities to investors

By Sara Rosenberg

New York, Oct. 16 – Consol Mining Corp. (to be renamed Consol Energy Inc.) launched at its bank meeting on Monday $800 million of new credit facilities, according to a market source.

The facilities consist of a $300 million four-year revolver, a $100 million four-year term loan A and a $400 million five-year covenant-light term loan B.

Price talk on the term loan B is Libor plus 525 basis points with a 1% Libor floor and an original issue discount of 99, the source said.

The term loan B has 101 soft call protection for one year and an excess cash flow sweep of 75% at total net leverage of 2 times, 50% at total net leverage of less than 2 times but more than or equal to 1.5 times and 0% at total net leverage of less than 1.5 times.

Covenants under the revolver and term loan A are total net leverage, first-lien gross leverage and fixed-charge coverage.

Amortization on the term loan A is 15% in years one and two, 25% in year three and 45% in year four, and amortization on the term loan B is 1% per annum.

Incremental allowance is equal to the greater of $100 million and an amount such that first-lien gross leverage does not exceed 1.5 times. Amounts used for revolver are capped at $100 million.

Expected credit facilities ratings are Ba3/B+.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, PNC Capital Markets and Bank of America Merrill Lynch are the joint lead arrangers on the deal.

Commitments are due at 5 p.m. ET on Oct. 26, the source added.

Proceeds will be used to help fund the separation of Consol Mining from Consol Energy Inc.

Closing is expected in mid-to-late November.

Through the separation, Canonsburg, Pa.-based Consol Mining will take the Pennsylvania mining complex, Consol’s ownership interest in CNX Coal Resources LP, the marine terminal at Baltimore Port, undeveloped coal reserves located in the Northern Appalachian, Central Appalachian and Illinois basins and related coal assets and liabilities.

The remaining Consol company will own the exploration and production assets, specifically developed and undeveloped oil and gas properties, both leased and owned in fee, located primarily in Appalachia, with a primary focus in the continued development of Marcellus Shale acreage and the delineation and development of Utica Shale acreage, along with water services and land resource management services.

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