Arch Coal to reduce revolver debt with proceeds from convertible offering

By Sara Rosenberg

New York, Jan. 23 - Arch Coal Inc. plans to reduce indebtedness under its $350 million revolver and repaying lines of credit.

The St. Louis coal producer intends to raise the funds for this debt reduction through a public offering of 3 million shares or $150 million of perpetual cumulative convertible preferred stock. The company also will grant the underwriters an over-allotment option to purchase up to an additional 450,000 shares.

The convertible is scheduled to price late Monday via bookrunner Merrill Lynch & Co.

Hexcel reduced revolver by $21.2 million in December

New York, Jan. 23 - Hexcel said it made a voluntary reduction in its revolver commitment of $21.2 million in December bringing the total of the undrawn loan to $87.9 million. This reduction reduces the spread that Hexcel will pay on advances in 2003 and fees payable for unutilized commitments.

Currently, the company is looking to refinance its senior credit facility in conjunction with a $125 million equity investment in the first half of 2003, the company said in a news release. However, since the refinancing may not occur before the end of the first quarter, Hexcel is seeking an amendment to its credit facility to change financial covenants to accommodate the expected financial performance in the first two quarters of 2003.

Hexcel is a Stamford, Conn. producer of advanced structural materials.

Georgia-Pacific to pay down $1.5 billion bank debt from notes

New York, Jan. 23 - Georgia-Pacific Corp. said it will use proceeds from its $1.5 billion senior notes offering to pay down bank debt.

The Atlanta, Ga. paper and building products company will repay $500 million outstanding under its capital markets bridge facility, which matures Aug. 16, 2003, and $1 billion of bank debt outstanding under its revolving credit facility.

Following the offering Georgia-Pacific will have $1.7 billion outstanding and $1.3 billion of available liquidity on the revolver.

The note deal was increased from an originally announced size of $500 million and consisted of $800 million 9.375% notes due 2013 and $700 million 8.875% notes due 2010.

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