Rhino Energy reduces loan capacity to $75 million, extends maturity

By Tali Rackner

Norfolk, Va., May 16 – Rhino Resource Partners LP wholly owned subsidiary Rhino Energy LLC entered into an amendment to its credit agreement on Friday to extend the term of the senior secured credit facility to July 31, 2017, according to an 8-K filing with the Securities and Exchange Commission.

Under this fifth amendment, the credit facility will be automatically extended to Dec. 31, 2017 if revolving credit commitments are reduced to $55 million or less on or before July 31, 2017.

The amendment also reduces the revolving credit commitments under the facility to a maximum of $75 million and maintains the amount available for letters of credit at $30 million. It further reduces the revolving credit commitments over time on a dollar-for-dollar basis.

The maximum leverage ratio was also revised to 7.5 times through May 31, 7.25 times through Aug. 31, 7 times through Nov. 30, 2016, 6.75 times through March 31, 2017, 6.25 through June 30, 2017, 6 times through Nov. 30, 2017 and 5.5 times through Dec. 31, 2017.

The leverage ratios will be reduced by 0.5 times for every $10 million of aggregate proceeds received by the partnership from: (a) the issuance of equity by the partnership (excluding any Royal Energy Resources Inc. capital contributions); and/or (b) the sale of assets, provided that the leverage ratio shall not be reduced below 3.5 times. The amendment removes the $5 million minimum liquidity requirement and requires the partnership to have any deposit, securities or investment accounts with a member of the lending group.

PNC Bank, NA is the administrative agent, PNC Capital Markets and Union Bank, NA, are joint lead arrangers and bookrunners, Union Bank, NA is the syndication agent, Raymond James Bank, FSB, Wells Fargo Bank, NA and the Huntington National Bank are co-documentation agents.

Rhino Resource operates both surface and underground mines in Colorado, Kentucky, Ohio and West Virginia and is based in Lexington, Ky.

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