Coronado ups pricing on $700 million term loans to Libor plus 650 bps

By Sara Rosenberg

New York, March 19 – Coronado Australia Holdings Pty. Ltd. increased pricing on its $550 million seven-year term loan B (B1/B+) and $150 million seven-year term loan C (B1/B+) to Libor plus 650 basis points from Libor plus 625 bps, according to a market source.

In addition, the original issue discount on the term loans was changed to 97 from 99 and the call protection was revised to a 101 hard call for one year, with the excess cash flow sweep at par, from a 101 soft call for six months, the source said.

Also, the incremental free and clear was lowered to $200 million from $400 million and the unlimited is set at up to secured net leverage ratio of 0.5 times with a hard dollar amount cap of $500 million including the free and clear. Voluntary repayments do not increase the incremental facility, and MFN protection also includes secured notes.

The excess cash flow sweep is set at 75% for 2018, and thereafter it’s 75% if secured net leverage is greater than 1 time, 50% if secured net leverage is less than 1 time, and once $400 million of term loans have been repaid it’s 75% if secured net leverage is greater than 2 times, 50% if leverage if greater than 1 times but less than 2 times, 25% if leverage is greater than 0.5 times but less than 1 times and 0% if leverage is less than 0.5 times, the source continued.

Restricted payments is set at a $35 million starter basket plus a customary excess cash flow builder. Restricted payments amount is subject to an equivalent amount of term loan repayment, subject to a paydown cap of $400 million.

The term loan still has a 1% Libor floor.

Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are bookrunners for the transaction.

Commitments are due at noon ET on Tuesday and allocations are expected thereafter, the source added.

Proceeds will be used for the acquisition of the Curragh coal mine in central Queensland, Australia, from Wesfarmers Ltd. for A$700 million.

Coronado Australia is a metallurgical coal producer. Parent Coronado Coal, LLC is based in Beckley, W.Va., and is a portfolio company of private equity company Energy & Minerals Group.

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