Westmoreland Coal reports final results of tender offer for 10¾% notes

By Toni Weeks

San Luis Obispo, Calif., Dec. 16 – Westmoreland Coal Co. announced the final results for the tender offer for any and all of its outstanding $675,485,000 principal amount of 10¾% senior secured notes due 2018.

The company said it took in tenders for $664.96 million, or 98.44%, of the notes by the expiration date, midnight ET on Dec. 15, according to a press release.

As previously announced, the company had also solicited consents to proposed amendments that would eliminate most of the restrictive covenants and some events of default contained in the indenture governing the notes, for which it needed approval from noteholders representing a majority in principal amount of the notes, as well as release the security for the notes and some events of default relating to the security for the notes, for which it needed approval from noteholders representing at least 75% in principal amount.

As of 5 p.m. ET on Dec. 1, the consent payment deadline, holders had tendered $664,002,000, or 98.3%, of the outstanding notes, giving the company the required consents to approve the proposed amendments under the consent solicitation, as already reported.

Holders who tendered their notes by the consent payment deadline received the total consideration of $1,048.75 per $1,000 principal amount of notes, which included a consent payment of $30.00 per $1,000 of notes. Holders tendering after the consent payment deadline will not receive the consent payment. The company is also paying accrued interest.

The company also issued a call to redeem any notes that are still outstanding following the tender offer. The redemption will occur on Feb. 1.

When the tender offer was announced, Westmoreland said it would be subject to the satisfaction of some conditions, including the receipt of at least $400 million in a private offering of new notes, at least $300 million from a new term loan with BMO Capital Markets Corp. as lead arranger and Bank of Montreal as administrative agent and the necessary consents described above. On Tuesday, the company closed on a private offering of $350 million of 8¾% senior secured notes due 2022 and a $350 million senior secured term loan due 2020, according to the press release. Additionally, concurrently with the closing of the offering of the new notes and the term loan, the company entered into a second amended and restated revolving credit facility with PrivateBank and Trust Co.

The company funded the consideration paid to the tendering holders with the proceeds of the new notes offering and term loan along with available cash on hand, the release said.

BMO Capital Markets Corp. (attn.: Brian Perman, 800 221-9443 or 212 702-1191) was the dealer manager for the offer and solicitation agent for the consent solicitation.

The independent coal company is based in Englewood, Colo.

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