Foresight Energy trims term loan to $450 million, increases pricing

By Sara Rosenberg

New York, Aug. 15 - Foresight Energy LLC downsized its seven-year covenant-light term loan to $450 million from $600 million and increased pricing to Libor plus 450 basis points from talk of Libor plus 375 bps to 400 bps, according to a market source.

The term loan still has a 1% Libor floor, an original issue discount of 99, 101 soft call protection for six months and amortization of 1% per annum.

The company's now $950 million senior secured credit facility, down from $1.1 billion, also includes a $500 million five-year revolver.

The revolver has maximum net senior secured leverage and minimum interest coverage ratios.

Recommitments are due at 2 p.m. ET on Friday, the source said.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Credit Agricole Securities (USA) Inc. are the lead banks on the deal.

Proceeds will be used to fund a tender offer for the company's $600 million 9 5/8% senior notes due 2017 and to finance a dividend payment.

The tender offer expires on Aug. 19.

Due to the term loan downsizing, the company will no longer repay its existing Longwall financing arrangements, the source added.

The company is also issuing $600 million of senior unsecured notes, upsized from $500 million.

The increased proceeds from the bond deal will fund a $100 million upsize to the dividend payment to $375 million from $275 million.

Foresight is a St. Louis-based producer of thermal coal.

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