Peabody gives early results of exchange, consent, moves early deadline

Chicago, Jan. 8 – Peabody Energy Corp. announced the early tender results of its exchange offer and consent solicitation and extended the early tender date to 5 p.m. ET on Jan. 15 in a press release on Friday evening.

As previously reported, the company is offering to exchange its outstanding $459 million of 6% senior secured notes due March 31, 2022 (Cusips: 70457LAA2, U7049LAA6) for a combination of cash and new 10% and 8½% senior secured notes due Dec. 31, 2024.

As of the previously announced early deadline, noteholders had tendered approximately 85% of the outstanding notes, or $391.2 million principal amount of the 6% notes.

Exchange offer

The new 10% notes will be issued by indirect Peabody subsidiaries PIC AU Holdings LLC and PIC AU Holdings Corp., while the new 8½% notes will be issued by Peabody.

Noteholders who tender their notes before the now extended early expiration date will receive $422.66 face amount of the 10% notes and $555.74 face amount of the 8½% (6% cash, 2½% PIK) notes plus a cash payment of $21.60 adding up to a total consideration of $1,000 for each $1,000 face amount tendered.

Early tendering noteholders will also receive a $10 early tender premium for each $1,000 face amount tendered.

The exchange consideration for noteholders who tender after the early deadline but before the expiration time of 11:59 p.m. ET on Jan. 25 will receive $422.66 of the 10% notes and $577.34 of the 8½% notes with no cash payment nor an early tender premium.

The amounts in the exchange offer are based on a pro rata determination that assume an 80% participation by the early tender date and full participation by the final time. The offer is conditioned upon a minimum participation threshold of 95%.

The exchange offer began on Dec. 24.

The right to withdraw tenders has expired.

Consents

Simultaneously with the exchange offer, Peabody is seeking consents to amend the indenture of the existing notes to eliminate substantially all of the restrictive covenants and some events of default, and to release the collateral securing the notes. The collateral is 100% equity interest in a subsidiary that owns the Australian Wilpinjong coal mining complex.

The company needed consents from noteholders representing a majority of the notes for the amendments and to release the collateral consents were required from noteholders representing at least 66 2/3% of the notes.

Sufficient consents have been received for both.

As a result, the amendments will become operative and the collateral will be released upon the completion of the exchange offer.

Details

The company has also, in connection with the exchange offer and within 15 days of the settlement date, agreed to purchase up to $22.5 million in total accreted value of the new Peabody notes at a purchase price equal to 80% of the accreted value of the new notes, plus interest, if any, to the applicable purchase date.

Global Bondholder Services Corp. (212 430-3774, 866 470-4500; https://gbsc-usa.com/eligibility/peabody) is the information agent and exchange agent for the exchange and consent solicitation.

Peabody Energy is a St. Louis-based coal producer.

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