Murray/Foresight Energy reveal talk on $2.25 billion of term loans

By Sara Rosenberg

New York, March 20 – Murray Energy Corp. and Foresight Energy LP came out with price talk on their $2.25 billion of term loan B debt in connection with a bank meeting on Friday, according to a market source.

The $1.6 billion term loan B at Murray Energy is talked at Libor plus 575 basis points with a 1% Libor floor and an original issue discount of 98, and the $650 million term loan B at Foresight Energy is talked at Libor plus 475 bps with a 1% Libor floor and a discount of 99, the source said.

Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are the bookrunners on the deal.

Commitments are due on April 1, the source added.

Proceeds will be used to help fund Murray Energy’s acquisition of an 80% voting interest in Foresight Energy GP LLC with a 77.5% interest in the incentive distribution rights and about 50% of the limited partner interest in Foresight Energy LP, refinance Murray Energy’s existing term loan B and refinance Foresight Energy’s existing term loan and revolver.

Other funds for the transaction will come from a $125 million asset-based revolver at Foresight Energy and the issuance by Murray Energy of about $860 million of senior secured second-lien notes, the company disclosed in a news release.

In addition, Murray Energy plans to amend its existing asset-based credit facility and to solicit consents to amend the indentures relating to its existing 9˝% second-lien notes due 2020 and its existing 8 5/8% second-lien notes due 2021 to permit the acquisition and related financing transactions.

The acquisition will constitute a change-of-control event for the existing Foresight 7 7/8% notes due 2020, unless the indenture is amended. Foresight expects to refinance with debt any notes tendered pursuant to a change-of-control offer.

St. Clairsville, Ohio-based Murray Energy and St. Louis-based Foresight Energy are coal companies.

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