Rhino Energy reduces loan capacity to $80 million, sets July maturity

By Wendy Van Sickle

Columbus, Ohio, March 23 – Rhino Resource Partners LP’s wholly owned subsidiary, Rhino Energy LLC, reduced borrowing capacity to $80 million and made other changes to its credit facility via a March 17 amendment to its credit agreement dated July 29, 2011 with PNC Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also changes the definition of “change-of-control” to allow Royal Energy Resources, Inc. to purchase the membership interests of Rhino GP LLC, the general partner of Rhino Resource Partners.

Additionally, the amendment sets the facility to expire in July 2016, reduces the sublimit for letters of credit to $30 million and eliminates the option for interest to be set using Libor plus an applicable margin. Instead, interest will be Prime rate plus 350 basis points.

The amendment also sets the maximum leverage ratio at 6.75 times and requires the parent to maintain minimum liquidity of $5 million and minimum EBITDA of $8 million, to limit its capital expenditures to $15 million and to provide monthly financial statements and a weekly rolling 13-week cash flow forecast to the administrative agent.

PNC Capital Markets LLC and Union Bank, NA as joint lead arrangers and bookrunners of the credit agreement. Union Bank, NA is the syndication agent, and Raymond James Bank, FSB, Wells Fargo Bank, NA and the Huntington National Bank are the co-documentation agents.

Rhino Resource operates both surface and underground mines in Colorado, Kentucky, Ohio and West Virginia and is based in Lexington, Ky.

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