Alpha Natural Resources launches $500 million term loan B

By Sara Rosenberg

New York, May 10 - Alpha Natural Resources Inc. held a bank meeting at 11:30 a.m. ET on Friday to launch a $500 million senior secured covenant-light term loan B due May 31, 2020 that is talked at Libor plus 275 basis points to 300 bps with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The term loan has 101 soft call protection for six months and amortization is 1% per annum, the source said.

Included in the loan is an allowance for $500 million of incremental facilities plus an additional $750 million if gross secured leverage is less than 2 times and another $750 million if gross secured leverage is less than 1 times, subject to 50 bps MFN, the source continued.

Commitments are due on May 17.

Citigroup Global Markets Inc., PNC Capital Markets LLC, Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Barclays, Wells Fargo Securities LLC, BMO Capital Markets Corp. and Goldman Sachs & Co. are the bookrunners on the deal.

Proceeds will be used to refinance $400 million of term loan A amortization and add cash to the balance sheet to fund the repurchase of convertible senior notes due 2015.

Alpha Natural Resources is an Abingdon, Va.-based coal producer.

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