Arch Coal subsidiary begins tender offer, consent bid for 6¾% notes

By Angela McDaniels

Tacoma, Wash., May 1 - Arch Coal, Inc. indirect subsidiary Arch Western Finance, LLC began a tender offer for its $450 million of 6¾% senior notes due 2013, according to a company news release.

Arch Western Finance is also soliciting consents to some proposed amendments to the indenture governing the notes that would eliminate most of the covenants, eliminate some default provisions and reduce the minimum notice period in the optional redemption provision to three days from 30 days.

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 company is offering $1,002.50 per $1,000 principal amount of notes. This includes a $30.00 consent payment for each note tendered by 5 p.m. ET on May 14, the consent expiration. The company will also pay accrued interest up to but excluding the applicable settlement date.

The offer includes an early settlement option for notes that are tendered prior to the consent expiration.

The tender offer will expire at 11:59 p.m. ET on May 29.

The completion of the tender offer is not conditioned on any minimum amount of notes being tendered, but it is conditioned on the execution of a supplemental indenture implementing the proposed amendments once consents are received from the holders of a majority of the outstanding notes and the completion of a financing transaction, the availability and terms of which will be determined by market conditions.

The dealer manager and solicitation agent is Bank of America Merrill Lynch (888 292-0070 or 980 387-3907). The depositary and information agent is Global Bondholder Services Corp. (212 430-3774 for banks and brokers; others call 866 387-1500).

Arch Coal is a coal producer and marketer based in St. Louis.

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