Foresight Energy firms $750 million term loan at Libor plus 575 bps

By Sara Rosenberg

New York, March 15 – Foresight Energy LLC set pricing on its $750 million five-year first-lien term loan at Libor plus 575 basis points, the high end of the Libor plus 550 bps to 575 bps talk, according to a market source.

In addition, the original issue discount on the term loan was changed to 98.5 from 99, the source said.

As before, the term loan has a 1% Libor floor, 101 soft call protection for one year and amortization of 1% per annum.

The company’s $920 million senior secured first-lien credit facility (B2/B/B+) also includes a $170 million revolver.

Goldman Sachs Bank USA, Huntington, Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. are the leads on the deal.

Proceeds will be used to help refinance about $349 million in second-lien senior secured PIK notes due 2021, about $300 million in second-lien senior secured exchangeable PIK notes due 2017 and existing credit facilities, including the roughly $353 million outstanding under the revolver and the roughly $296 million term loan.

Other funds for the transaction will come from $500 million in second-lien notes due 2024 and about $78 million of cash on hand.

In connection with the refinancing, Murray Energy Corp. intends to contribute to Foresight Energy about $60.6 million in cash in the form of common equity.

Also, Murray Energy is expected to exercise its option to acquire an additional 46% voting interest in Foresight Energy GP LLC, increasing its voting interest to 80%.

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

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