Magnum Coal talks $350 million seven-year second-lien notes at 10¾%-11%

By Paul A. Harris

St. Louis, June 25 - Magnum Coal Co. set price talk for its $350 million offering of seven-year senior secured second-lien notes (B3/B-) at 10¾% to 11% on Monday, according to a market source.

The offering is expected to price on Wednesday.

Lehman Brothers has the books for the Rule 144A for life notes, which come with four years of call protection, a three-year 35% equity clawback and a 101 change-of-control put provision.

Proceeds will be used to repay the Central Appalachian coal producer's existing term loan, to finance its letter-of-credit facility and for general corporate purposes.

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