Natural Resource swaps out $241 million of 9 1/8% notes, sells $105 million of new 10˝% notes

By Susanna Moon

Chicago, March 6 – Natural Resource Partners LP exchanged $241 million principal amount of its 9 1/8% senior notes due 2018 for new 10˝% notes due March 15, 2022 last Thursday and issued $105 million of the new notes in exchange for cash, according to an 8-K filing with the Securities and Exchange Commission.

As announced Feb. 23, the company entered into the notes agreement with holders of about 57% of the existing notes.

The company said it would redeem $90 million of its 9 1/8% senior notes due 2018 and repay NRP Operating LLC’s revolving credit facility using proceeds of a preferred units and new notes.

The new notes issued for cash were sold at a price of 98.75% with an original issue discount of 1.25%, and each consenting holder received a cash premium of 5.813% of par plus accrued interest.

The new notes will be callable beginning March 15, 2019 at 105.25% for the 12 months beginning March 15, 2019, at 102.625% for the 12 months beginning March 15, 2020 and at par after that.

Before March 15, 2019, the issuers may redeem up to 35% of the par amount of the new notes with proceeds of public or private equity offerings at a redemption price of 110.5% plus accrued interest to the redemption date, if at least 65% of the new notes issued remains outstanding immediately after the redemption and the redemption occurs within 180 days of the closing date of the equity offering.

The notes are putable at 101 if there is a change of control.

After the transactions close, NRP will have total debt of $944 million, including $346 million of the 2022 notes. NRP plans to redeem all remaining 2018 notes in October.

“These transactions mark the culmination of a two-year strategy focused on deleveraging NRP and extending our 2018 debt maturities,” Craig Nunez, chief financial officer, said in the press release.

“Following the closing of these transactions, we intend to continue to deleverage and improve our balance sheet with the ultimate goal of returning to growth for the benefit of our unitholders.”

Natural Resource is a Houston-based company that owns, manages and leases mineral properties in the United States and owns coal reserves in three major coal-producing regions: Appalachia, the Illinois Basin and the West.

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