New Issue: Alpha Natural Resources sells upsized $500 million six-year notes at par to yield 7½%

By Paul A. Harris

Portland, Ore., May 13 - Alpha Natural Resources, Inc. priced an upsized $500 million issue of senior secured second-lien notes due Aug. 1, 2020 (B2/B/) at par to yield 7½% on Tuesday, according to a syndicate source.

The deal was upsized from $400 million.

The yield printed at the tight end of the 7½% to 7¾% yield talk.

BofA Merrill Lynch, Citigroup Global Markets Inc., Barclays, BMO Capital Markets Corp., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the joint bookrunners.

The Bristol, Va.-based coal producer plans to use the proceeds to fund purchases or repayments of its 2 3/8% and 3¼% convertible notes due 2015 and for general corporate purposes.

Alpha Natural Resources supplies metallurgical coal to the steel industry and thermal coal to generate power.

Issuer:	Alpha Natural Resources, Inc.
Amount:	$500 million, increased from $400 million
Maturity:	Aug. 1, 2020
Securities:	Senior secured second-lien notes
Bookrunners:	BofA Merrill Lynch, Citigroup Global Markets Inc., Barclays, BMO Capital Markets Corp., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley & Co. LLC
Co-managers:	PNC Capital Markets LLC, BB&T Capital Markets
Coupon:	7½%
Price:	Par
Yield to worst:	7½%
Spread:	552 bps
First call:	Aug. 1, 2016 at 105.625
Trade date:	May 13
Settlement date:	May 20
Ratings:	Moody's: B2
	Standard & Poor's: B
Distribution:	Rule 144A for life and Regulation S
Price talk:	7½% to 7¾%
Marketing:	Roadshow

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