Westmoreland Coal gets enough consents to amend 10¾% senior notes

By Toni Weeks

San Luis Obispo, Calif., Feb. 7 - Westmoreland Coal Co. announced that it took in consents from holders representing about 83.5% of the principal amount of its existing 10¾% senior secured notes by 5 p.m. ET on Feb. 3, the deadline for the company's consent solicitation, exceeding the majority consent level required under the indenture to approve the amendments.

As previously noted, the amendments will permit an increase in borrowing availability under Westmoreland's revolving credit agreement and eliminate provisions relating to a separate credit agreement of Westmoreland Mining, LLC, which Westmoreland intends to terminate. The changes also include amendments to the notes' security agreement and intercreditor agreement.

According to a press release, the amendments will be implemented through the adoption of a second supplemental indenture, which will become operative only upon the completion of the acquisition of two Sherritt International Corp. subsidiaries and disbursement of the previously announced consent payment of $1.25 per $1,000 principal amount of existing notes that had consents submitted.

For the Sherritt acquisition, Westmoreland intends to increase the borrowing availability under its existing revolver, terminate the existing Westmoreland Mining credit agreement and use a portion of the proceeds of a new debt offering to prepay Westmoreland Mining's 8.02% senior guaranteed secured notes due March 31, 2018. The company completed a private offering of $425 million of 10¾% senior secured notes on Friday, according to the release.

Neither the Sherritt acquisition nor the Westmoreland Mining refinancing is conditioned on the receipt of consents to amend Westmoreland's 10¾% notes. The proposed amendments becoming operative, however, will be conditioned on completion of the Sherritt acquisition and on the consent payment.

BMO Capital Markets Corp. (800 221-9443 or 212 702-1191) and Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) are the solicitation agents. Global Bondholder Services Corp. (866 924-2200 or 212 430-3774) is the information and tabulation agent.

The coal company is based in Englewood, Colo.

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