New Issue: Alpha Natural Resources sells $500 million 9¾% notes due 2018 at 98.959 to yield 10%

By Paul A. Harris

Portland, Ore., Sept. 28 - Alpha Natural Resources, Inc. priced a $500 million issue of 9¾% senior notes due April 15, 2018 (B2/B+/) at 98.959 to yield 10% on Friday, according to a syndicate source.

The yield printed on top of yield talk.

Citigroup Global Markets Inc. was the left bookrunner. Barclays, J.P. Morgan Securities LLC, Bank of America Merrill Lynch and RBS Securities Inc. were the joint bookrunners.

The Bristol, Va.-based coal producer plans to use the proceeds to tender for a portion of its existing $659.1 million 3¼% convertible senior notes due 2015 and to add liquidity to its balance sheet.

Issuer:	Alpha Natural Resources, Inc.
Face amount:	$500 million
Proceeds:	$494,795,000
Maturity:	April 15, 2018
Securities:	Senior notes
Left bookrunner:	Citigroup Global Markets Inc.
Joint bookrunners:	Barclays, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, RBS Securities Inc.
Senior co-managers:	BMO Securities, Deutsche Bank Securities Inc., Goldman Sachs & Co., Mitsubishi, Morgan Stanley & Co. LLC, PNC Capital Markets
Co-managers:	BB&T, Credit Agricole CIB, Banco Santander, SMBC, US Bancorp
Coupon:	9¾%
Price:	98.959
Yield:	10%
Spread:	939 bps
Call protection:	Non-callable
Make-whole:	Treasuries plus 50 bps
Equity clawback:	35% at 109.75 until Oct. 15, 2015
Change-of-control put:	101%
Trade date:	Sept. 28
Settlement date:	Oct. 11
Ratings:	Moody's: B2
	Standard & Poor's: B+
Distribution:	SEC registered
Price talk:	10% area
Marketing:	Roadshow

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