Arch Coal begins tender offer for $600 million of 8¾% notes due 2016

By Susanna Moon

Chicago, Dec. 2 - Arch Coal, Inc. said it began a cash tender offer for its outstanding $600 million principal amount of 8¾% senior notes due 2016.

Arch is also soliciting consents to amend the notes to eliminate most of the covenants and some default provisions.

The total purchase price will be $1,049.25 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Dec. 13.

The total payment includes an early premium of $30 per $1,000 of notes.

Those who tender after the consent date will receive $1,019.25 per $1,000 of notes.

The company also will pay accrued interest up to but excluding the settlement date.

Holders who tender their notes will be deemed to consent to the proposed amendments and holders may not deliver consents without tendering their notes.

The tender offer will end at 11:59 p.m. ET on Dec. 30, with settlement set for the following day.

The completion of the tender offer is not conditioned upon any minimum amount of notes being tendered but is conditioned on the execution of a supplemental indenture and the completion of one or more financing transactions, according to a company press release.

BofA Merrill Lynch (888 292-0070 or 980 387-3907 collect) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (212 430-3774 for banks and brokers only or 866 807-2200 for all others) is the depositary and information agent.

Arch Coal is a St Louis-based coal producer.

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