Cloud Peak Energy enters $500 million amended, restated revolver

By Jennifer Chiou

New York, June 6 - Cloud Peak Energy Resources LLC entered into on Friday an amended and restated credit agreement with Morgan Stanley Senior Funding, Inc. as administrative agent, providing for a $500 million five-year secured revolving credit facility, according to an 8-K filed with the Securities and Exchange Commission.

The company may opt to increase the size of the facility by up to $200 million.

The revolver matures on June 3, 2016.

Pricing on the loan can range from Libor plus 175 basis points to 250 bps depending on the company's leverage ratio.

Under the agreement, the company must maintain defined minimum levels of interest coverage, specifically a ratio of EBITDA-to-consolidated net cash interest expense greater than or equal to 2.50 to 1 through June 30, 2013 and 2.75 to 1 from July 1, 2013 to maturity as well as a ratio of funded debt-to-EBITDA less than or equal to 3.75 to 1 through June 30, 2013 and 3.50 to 1 thereafter.

Cloud Peak Energy will pay a commitment fee of between 25 bps and 50 bps per year, and there is a 25 bps letter-of-credit fee.

In the near term, the filing stated that $10.5 million under the credit facility is expected to be used for letters of credit, which will be used as collateral to secure company obligations to reclaim lands used for mining.

Obligations under the credit facility are supported by a guarantee by the company's domestic restricted subsidiaries.

Cloud Peak is a Gillette, Wyo.-based coal company.

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