Oxford Mining lenders agree to forbear default rights under loans

By Marisa Wong

Madison, Wis., May 16 - Oxford Mining Co. LLC entered into a forbearance agreement to its credit agreement dated July 6, 2010 with Citicorp USA, Inc. as administrative agent and majority lenders Citibank, NA, Fifth Third Bank, Societe Generale, Barclays Bank plc, Huntington National Bank, Wells Fargo Bank, NA, Raymond James Bank, NA and Credit Suisse AG, Cayman Islands Branch.

The forbearance agreement, completed on May 14, states that effective from May 15 Oxford Mining fails to comply with specific financial covenants in the credit agreement, which constitutes immediate events of default. As a result, the lenders are able to declare all outstanding amounts under the credit agreement immediately due and payable.

However, the lenders listed above have agreed to forbear from exercising their default-related remedies against the company for a period beginning on May 14 and ending on the earliest of June 15, the occurrence of a bankruptcy or other similar default, the occurrence of any other event of default and the occurrence of particular early termination events specified in the forbearance agreement.

The credit agreement is comprised of a $115 million revolving credit line that matures in July 2013 and a $60 million term loan that matures in July 2014.

As of March 31, Oxford Mining had $147.5 million of borrowings outstanding, including $104 million under the revolving credit line and $43.5 million under the term loan. The company also had $10.9 million in letters of credit outstanding.

Oxford Mining is a Columbus, Ohio-based producer of steam coal and surface mined coal.

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