Alpha Natural Resources amends credit facility covenants and pricing

By Sara Rosenberg

New York, June 27 - Alpha Natural Resources Inc. amended its $1.6 billion secured credit facility, revising financial covenants and the pricing grid and providing additional real property collateral to secure the debt, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Through the amendment, the company replaced its maximum net leverage ratio with a maximum net secured leverage ratio of 2.5 times through the end of 2014 and relaxed the maximum net leverage ratio for the first quarter of 2015 to 4.25 times and for the second quarters of 2015 to 4 times.

Additionally, the minimum interest coverage ratio was relaxed to 2.25 times for the fourth quarter of this year, 2 times for the first quarter 2013 and 2.25 times for the second quarter 2013 through the fourth quarter of 2013.

Furthermore, a minimum liquidity covenant of $500 million was added through the end of 2014.

Regarding pricing, the spread at net leverage of greater than 3.75 times was increased to Libor plus 300 basis points from Libor plus 250 bps. As a result, pricing can now range from Libor plus 200 bps to 300 bps based on leverage.

Also, the amendment modified the requirements for incremental term loan or revolver commitments in excess of $500 million.

The amendment was completed on June 26.

Citicorp North America Inc. is the administrative on the deal.

Alpha Natural Resources is a Bristol, Va.-based producer of coal.

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