Alpha Natural Resources to get $500 million credit facility via Citi, UBS

By Sara Rosenberg

New York, Sept. 26 - Alpha Natural Resources Inc. plans to come to market with a new $500 million credit facility, company officials said in a conference call Monday.

Citigroup and UBS are joint bookrunners on the deal, with Citi the left lead.

The facility consists of a $250 million five-year revolver and a $250 million seven-year term loan B, officials said in the call, adding they estimate interest rates on the loans to range in the Libor plus 175 to 200 basis points area.

A bank meeting date has not yet been scheduled for the deal, according to a market source.

Proceeds will be used to help fund the acquisition of coal reserves and operations affiliated with the privately held Nicewonder coal group in southern West Virginia and southwestern Virginia for a purchase price of $316.2 million and to refinance the company's existing $175 million revolver.

Under the purchase agreement, Alpha subsidiaries will issue Nicewonder affiliates $60 million of Alpha stock and pay $256.2 million in cash and seller notes.

Closing is anticipated by late October, subject to the satisfaction of conditions outlined in the purchase agreements, including the securing of financing and necessary regulatory approvals.

Alpha Natural Resources if an Abingdon, Va., Appalachian coal producer.

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