Alliance Resource’s coal unit signs for replacement credit facility

Chicago, Jan. 30 – Alliance Resource Partners, LP announced that subsidiary Alliance Coal, LLC signed for a replacement credit agreement that lists PNC Bank, NA as administrative agent on Jan. 13, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement provides for a $425 million revolver that includes a sublimit of $15 million for swingline borrowings and allows for the issuance of letters of credit up to the full amount of $425 million.

There is also a $75 million term loan.

The entire agreement matures on March 9, 2027.

There is a springing maturity if on Jan. 30, 2025 the company’s 7˝% senior notes due May 1, 2025 are still outstanding and Alliance Coal does not on that date have liquidity of at least $200 million.

Amortization on the term loan will be in 6.25% quarterly installments starting with the quarter ending June 30.

Borrowings will bear interest at SOFR plus 300 basis points to 350 bps, based on the consolidated debt to consolidated cash flow ratio.

Undrawn portions of the revolver will be subject to a 50 bps commitment fee.

The credit facility replaces the $459.5 million credit agreement that had Alliance Resource Operating Partners, LP as borrower, from March 9, 2020 with a March 9, 2024 expiration date.

The credit agreement is guaranteed by the partnership, Alliance Resource Operating Partners, UC Coal, LLC, UC Mining, LLC, UC Processing, LLC, MGP II, LLC and most of Alliance Coal’s direct and indirect subsidiaries.

It is also secured by the seven active coal mines and related support facilities of Alliance Coal.

The joint lead arrangers and joint bookrunners are PNC Capital Markets LLC, BOFK, NA (Bank of Oklahoma), Fifth Third Bank, NA, Old National Bank and Truist Securities, Inc.

Documentation agents are Planters Bank, Inc., City National Bank of West Virginia, Community Trust Bank, Inc. First Financial Bank, First Foundation Bank and Summit Community Bank.

Alliance also announced that it renewed its $60 million accounts receivable securitization facility.

Alliance Resource is a Tulsa, Okla.-based diversified natural resource company that generates income from coal production and oil and gas mineral interests.

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