Westmoreland plans at least $300 million term loan for bond tender

By Sara Rosenberg

New York, Nov. 17 – Westmoreland Coal Co. said in an 8-K filed with the Securities and Exchange Commission on Monday that it will get an at least $300 million term loan in connection with a tender offer for its roughly $675.5 million of 10¾% senior secured notes.

As previously reported, the company is set to hold a bank meeting at 10 a.m. ET on Wednesday to launch a new credit facility.

BMO Capital Markets is the lead on the deal.

Other funds for the bond buyback will come from at least $400 million of new notes.

The tender offer will expire on Dec. 15.

The refinancing is being done in connection with the company’s combination with Oxford Resource Partners LP.

Under the agreement, Westmoreland will acquire Oxford’s general partner, Oxford Resources GP LLC, for $30 million plus an additional $3.5 million if a specified coal acquisition is completed within one year of the purchase agreement. In addition, Westmoreland will contribute some royalty-bearing coal reserves to Oxford in return for Oxford common units.

With the transaction, Oxford’s name will be changed to Westmoreland Resource Partners LP and Oxford Resources GP’s name will be changed to Westmoreland Resources GP LLC.

Closing is expected in the fourth quarter.

Englewood, Colo.-based Westmoreland and Columbus, Ohio-based Oxford are coal companies.

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