Arch Coal to redeem 8¾% notes remaining after tender offer at 104.375

By Marisa Wong

Madison, Wis., Dec. 19 - Arch Coal, Inc. said it will redeem all of its 8¾% senior notes due 2016 that remain outstanding following completion of its previously announced tender offer on Dec. 31 at 104.375 plus accrued interest.

The amount of accrued interest will be about $36.46 for each $1,000 principal amount of notes, according to a notice.

The company announced the redemption on Tuesday but had not disclosed the redemption price.

As of Dec. 17, $161,893,000 of the notes remained outstanding.

The redemption will be funded with proceeds from a new term loan B and an offering of 8% senior secured second-lien notes, along with cash on hand.

On Dec. 13 Arch Coal announced that it took in tenders for $438,107,000 of its outstanding $600 million of 8¾% notes by 5 p.m. ET on Dec. 13, the consent expiration for the tender offer and consent solicitation that began Dec. 2.

The company said on Tuesday that it accepted for purchase and already settled the $438,107,000 of early tenders.

The tender offer will end at 11:59 p.m. ET on Dec. 30.

Offer details

According to a prior press release, the amount of consents received exceeded the minimum needed to amend the indenture, and Arch Coal and trustee U.S. Bank NA have executed a supplemental indenture that eliminates most of the covenants and some default provisions applicable to the notes.

The total purchase price was $1,049.25 for each $1,000 principal amount of notes tendered by the consent deadline and included an early premium of $30.00 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 applicable settlement date.

Final settlement is set for the day after the offer expires.

Holders who tendered their notes by the early deadline were deemed to consent to the proposed amendments, and holders could not deliver consents without tendering their notes.

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, both of which have now been satisfied.

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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