Westmoreland Coal solicits consents to amend 10¾% senior secured notes

By Marisa Wong

Madison, Wis., Jan. 24 - Westmoreland Coal Co. announced it is soliciting consents from holders of its outstanding 10¾% senior secured notes due 2018 to approve proposed amendments to the indenture relating to the notes.

Westmoreland needs consents from holders of a majority in principal amount of the notes to amend the indenture.

The proposed amendments would permit an increase in borrowing availability under Westmoreland's revolving credit agreement and eliminate provisions relating to a separate credit agreement of Westmoreland Mining, LLC, which Westmoreland intends to terminate.

The proposed changes also include amendments to the notes' security agreement and intercreditor agreement.

The consent solicitation is being conducted in connection with Westmoreland's proposed acquisition of two Sherritt International Corp. subsidiaries. For the Sherritt acquisition, Westmoreland intends to increase the borrowing availability under its existing revolver, terminate the existing Westmoreland Mining credit agreement and use a portion of the proceeds of a new debt offering to prepay Westmoreland Mining's 8.02% senior guaranteed secured notes due March 31, 2018.

Neither the Sherritt acquisition nor the Westmoreland Mining refinancing is conditioned on the receipt of consents to amend Westmoreland's 10¾% notes. The proposed amendments becoming operative, however, will be conditioned on completion of the Sherritt acquisition and on a consent payment.

Westmoreland will make a cash consent payment of $1.25 per $1,000 principal amount of notes for which consents are delivered by the expiration date for the consent solicitation, namely 5 p.m. ET on Feb. 3.

Consents may be revoked at any time prior to the expiration date.

BMO Capital Markets Corp. (800 221-9443 or 212 702-1191) and Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) are the solicitation agents. Global Bondholder Services Corp. (866 924-2200 or 212 430-3774) is the information and tabulation agent.

The coal company is based in Englewood, Colo.

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