New Issue: Arch Coal prices $500 million 10-year notes at par to yield 7¼%

By Paul A. Harris

St. Louis, Aug. 2 - Arch Coal, Inc. priced a $500 million issue of 10-year senior notes (B1/BB-/) at par to yield 7¼% on Monday, according to an informed source.

The yield printed at the tight end of the 7 3/8% area price talk.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and J.P. Morgan Securities Inc. were the joint bookrunners for the quick-to-market deal. PNC Capital Markets LLC was the lead manager.

Senior co-managers were BMO Capital Markets, Credit Agricole CIB, RBS Securities Inc. and U.S. Bancorp. And co-managers were Barclays Capital, FBR Capital Markets, Mitsubishi UFJ Securities (USA), Inc., Morgan Keegan & Co., Natixis Bleichroeder, Raymond James & Associates, Inc., Santander Investment Securities Inc., Simmons & Co. International, Stifel, Nicolaus & Co. and UBS Investment Bank.

The St. Louis-based coal producer will use the proceeds to help fund the redemption of about $500 million of its 6¾% notes due 2013 and for general corporate purposes.

Issuer:	Arch Coal, Inc.
Amount:	$500 million
Maturity:	Oct. 1, 2020
Description:	Senior notes
Bookrunners:	Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. Inc., J.P. Morgan Securities Inc.
Lead manager:	PNC Capital Markets LLC
Senior co-managers:	BMO Capital Markets, Credit Agricole CIB, RBS Securities Inc., U.S. Bancorp
Co-managers:	Barclays Capital, FBR Capital Markets, Mitsubishi UFJ Securities (USA), Inc., Morgan Keegan & Co., Natixis Bleichroeder, Raymond James & Associates, Inc., Santander Investment Securities Inc., Simmons & Co. International, Stifel, Nicolaus & Co., UBS Investment Bank
Coupon:	7¼%
Price:	Par
Yield:	7¼%
Spread:	431 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Oct. 1, 2015, then callable at 103.625, 102.417, 101.208, par on and after Oct. 1, 2018
Equity clawback:	35% at 107.25 until Oct. 1, 2013
Trade date:	Aug. 2
Settlement date:	Aug. 9
Ratings:	Moody's: B1
	Standard & Poor's: BB-
Distribution:	SEC registered
Price talk:	7 3/8% area
Marketing:	Quick-to-market

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