Coeur Mining modifies pricing, financial covenants in credit agreement

By Toni Weeks

San Luis Obispo, Calif., Jan. 16 - Coeur Mining, Inc. and its subsidiaries, Coeur Alaska, Inc. and Coeur Rochester, Inc., amended their credit agreement dated Aug. 1, 2012 with Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment, completed on Jan. 16, adjusted the pricing of loans and undrawn commitments as well as financial covenants and negative covenant provisions under the credit agreement.

The interest rate is now Libor plus 225 basis points to 400 bps, changed from the previous interest rate of Libor plus 225 bps to 325 bps. The commitment fee is now 50 bps to 100 bps, modified from 50 bps to 75 bps. The exact margin and commitment fee depend on the company's ratio of consolidated debt to adjusted EBITDA.

In addition, the financial covenants were modified to require

• The ratio of consolidated debt to adjusted EBITDA to be not greater than 3.25 to 1.00 as of Dec. 31, or not greater than 4.75 to 1.00 in any fiscal period ending after Oct. 1, 2015;

• The ratio of adjusted EBITDA to interest expense to be not less than 3.00 to 1.00, subject to step-downs beginning with the fiscal quarter ending Sept. 30, 2014;

• The tangible net worth to be not less than the greater of (i) $900 million and (ii) 85% of the tangible net worth as of Dec. 31 of the previous fiscal year plus 25% of net income, if positive, for the period after Dec. 31 of such previous fiscal year to the date or measurement, or minus any net losses with limits of $50 million on any net losses in any fiscal year;

• The ratio of consolidated secured debt to adjusted EBITDA, tested quarterly, to be not greater than 1.25 to 1.00; and

• The minimum cash balance, tested quarterly, to be not less than $50 million.

The amendment also made changes affecting the ability of the company to pay dividends and make share repurchases, the filing noted.

The company also announced that after preparing and reviewing its 2013 financial statements, it concluded that it needs to record a material impairment charge to its mining properties at its Palmarejo and Kensington mines, primarily the result of sustained lower silver and gold prices. The non-cash impairment charge is expected to be about $770 million, and the impairment will result in no future cash expenditures, the company said in the filing.

Chicago-based Coeur is a gold and silver mining company.

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