Walter Energy increases term loan B interest rate, amends covenants

By Toni Weeks

San Luis Obispo, Calif., March 27 - Walter Energy Inc. announced amendments made on March 17 to its $2,725,000,000 credit agreement.

According to a press release, the amendment increases the interest rate payable on the term loan B under the credit agreement by 50 basis points. It also extends the maturity of 81.6% of the revolving commitments to October 2017 and reduces by 20% the commitments from those "extending lenders."

The amendment also allows the company to repay its term loan A without making a pro rata repayment to its term loan B.

Finally, the amendments modify certain incurrence covenants to provide additional flexibility to the company, eliminates the liquidity and fixed-charge coverage maintenance covenants and modifies the secured leverage ratio covenant, including to make it apply only to the commitments of the extending revolving lenders.

The amendments became effective upon completion of the issuance on Thursday of $200 million of 9½% senior secured notes due 2019 and $350 million of 11%/12% senior secured second-lien PIK toggle notes due 2020 as well as the repayment in full of the term loan A, which both occurred on Thursday.

Walter is a Birmingham, Ala.-based pure-play metallurgical coal producer for the global steel industry.

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