Alliance Resource gets commitments to amend, extend revolving facility

By Tali Rackner

Minneapolis, April 3 – Alliance Resource Partners, LP received lender commitments to enter into an amendment to the credit agreement that governs its revolving credit facility and term loan, according to an 8-K filing with the Securities and Exchange Commission.

The amendment would, among other things, extend the maturity date of about $460.5 million of the revolving credit facility to May 2021 from May 2019, eliminate the conditions to prevent the facility from maturing earlier than scheduled and improve certain financial covenants to be more favorable to the company.

The amendment would also eliminate the requirement that Alliance maintain a certain level of mineable coal reserves and further limit the intermediate partnership’s subsidiaries’ ability to incur unsecured debt directly as a borrower, with an exception for the co-issuer in a new senior note offering.

The company announced that subsidiaries Alliance Resource Operating Partners, LP and Alliance Resource Finance Corp. plan to offer $500 million of senior notes due 2025 in a private placement to eligible purchasers.

Proceeds will be used to repay outstanding borrowings under the revolver and term loan and repay outstanding series B senior notes due 2018.

The effectiveness of the amendment is conditioned upon the completion of the note offering and the repayment of the $145 million outstanding series B notes.

Alliance Resource is a Tulsa, Okla.-based coal company.

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