Warrior Met Coal talks $350 million seven-year notes to yield 8%-8¼%; pricing Thursday

By Paul A. Harris

Portland, Ore., Oct. 26 – Warrior Met Coal, Inc. talked its $350 million offering of seven-year senior secured notes (B3/B-) to yield 8% to 8¼%, according to a syndicate source.

In addition to price talk the Brookwood, Ala.-based metallurgical coal producer also brought covenant changes.

These include the removal of a special call provision that would have allowed the issuer to redeem 10% of the notes annually at 103 during the three-year non-call period, after which the notes become callable at par plus 50% of the coupon.

Other covenant changes impose and/or increase restrictions upon how the company may disburse cash and incur debt.

Books close at 2 p.m. ET on Thursday, and the Rule 144A and Regulation S for life deal is set to price thereafter.

Goldman Sachs & Co. is the left bookrunner. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BMO Securities and RBC Capital Markets LLC are the joint bookrunners.

Apollo, Blackstone and KKR are the co-managers.

Proceeds, together with approximately $260 million cash on hand, will be used to pay a special cash dividend of about $600 million during 2017.

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