Walter Energy wraps loan amendment revising financial covenants

By Sara Rosenberg

New York, Aug. 17 - Walter Energy Inc. completed the amendment to its credit facility that relaxed the total leverage covenant and reset the interest coverage ratio, according to an 8-K filed with the Securities and Exchange Commission on Friday.

The amended leverage requirement is 3.75 times through the end of 2013, stepping down to 3.5 times thereafter, versus a prior ratio of 3.25 times, stepping down to 3 times in the quarter ended Dec. 31.

The interest coverage ratio is 3 times for the life of the loan, rather than the previous 3 times with a step-up to 3.5 times in the quarter ended Dec. 31.

Additionally, the amendment provides for a 25 basis point increase in pricing if leverage is above 3.25 times.

Furthermore, the company gained permission to issue senior secured bonds under its incremental basket.

Also, the way the leverage test is calculated was revised to remove the option to net out up to $100 million of unrestricted cash and the general investment basket was increased to $325 million from $150 million.

Morgan Stanley Senior Funding Inc. is the administrative agent on the deal.

Lenders were offered a 25 bps amendment fee.

The amendment was completed on Aug. 16.

Walter Energy is a Birmingham, Ala.-based pure-play metallurgical coal producer.

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