Alpha Natural Resources ups term B to $625 million, finalizes spread

By Sara Rosenberg

New York, May 20 - Alpha Natural Resources Inc. upsized its senior secured covenant-light term loan B (Ba1/BB) due May 31, 2020 to $625 million from $500 million and firmed pricing at Libor plus 275 basis points, the tight end of the Libor plus 275 bps to 300 bps talk, according to a market source.

Also, the Libor floor was reduced to 0.75% from 1%, the source said.

As before, the loan has an original issue discount of 991/2, 101 soft call protection for six months and amortization of 1% per annum.

Still 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.

Recommitments were due at noon ET on Monday, the source added.

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 add cash to the balance sheet to fund the repurchase of convertible senior notes due 2015, and, as a result of the upsizing, to repay the 2016 term loan A, as opposed to only refinancing $400 million of term loan A amortization.

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

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