Arch Coal sets talk in $2 billion two-part senior notes offering

By Paul A. Harris

Portland, Ore., June 7 - Arch Coal, Inc. set price talk for its $2 billion dual-tranche offering of senior notes (B1/B+) on Tuesday, according to an informed source.

The eight-year notes are talked with a yield in the 7% area, and the 10-year notes are talked to price with a yield that is 25 basis points greater the eight-year notes.

Tranche sizes remain to be determined.

The books close at 11 a.m. ET on Wednesday, and the deal is set to price thereafter.

Morgan Stanley & Co., Inc., PNC Capital Markets, Bank of America Merrill Lynch, RBS Securities Inc. and Citigroup Global Markets Inc. are the joint bookrunners for the Rule 144A with registration rights offering.

The eight-year notes come with four years of call protection, and the 10-year notes come with five years of call protection.

The St. Louis-based coal producer plans to use the proceeds to partially fund its acquisition of International Coal Group Inc. and related transactions, including the redemption, payment of cash resulting from the conversion of, or other retirement of outstanding International Coal debt.

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