Arch Coal $1.025 billion loan expected to close early April via PNC and JP Morgan Chase

By Sara Rosenberg

New York, March 18 - Arch Coal Inc. is expected to close on a $1.025 billion senior secured credit facility in early April, according to a syndicate source. PNC and J.P. Morgan Chase are co-lead arrangers and co-bookrunners on the deal. PNC Bank will also function as the administrative agent.

The credit facility is split into three segments. The $350 million five-year revolver has an interest rate of Libor plus 175 basis points and a commitment fee on undrawn funds of 37.5 basis points. The five-year $150 million term loan A has an interest rate of Libor plus 250 basis points and no amortization schedule. And the six-year $525 million term loan B has an interest rate of Libor plus 300 basis points and no amortization schedule.

The revolver is for Arch Coal Inc., while the two term loans are for the company's subsidiary, Arch Western Resources, LLC.

Security for the term credit facilities is Arch Western Resources' membership interest in its subsidiaries.

Proceeds from all tranches of the credit facility will be used to refinance existing debt.

Moody's Investors Service rates the credit facility Ba1 and Standard and Poor's rates it BB+.

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