Warrior Met Coal seeks to amend 8% notes to allow dividend payout

By Susanna Moon

Chicago, Feb. 26 – Warrior Met Coal, Inc. said it is soliciting consents for its $350 million principal amount of 8% senior secured notes due 2024 until 5 p.m. ET on March 2.

Warrior Met Coal is asking for consents to amend the limitation on the restricted payments covenant in the notes indenture to allow the company to make dividend or distribution payments to its equity holders that are declared before May 15 in an amount of up to $350 million, according to a company announcement.

The company seeks permission to do so without having to comply with the restricted payment offer requirements of the notes indenture, provided that it can satisfy the leverage ratio requirement for the unlimited restricted payment basket in the indenture and does not fund the dividend or distribution with the proceeds of contemporaneous borrowings under the company’s asset-based revolving credit facility, the release noted.

Holders must be of record as of Feb. 23.

The consent fee will be $10.00 per $1,000 principal amount.

The solicitation is being made concurrently with and is conditioned upon the closing of another $125 million principal amount of new 8% senior secured notes due 2024.

In order to amend the notes, the company must obtain consents from holders of at least a majority of the outstanding notes, which will include the $125 million of new notes.

The company said it has received non-binding indications of support from holders of about $94 million principal amount of notes. Assuming that $125 million of new notes are issued, the non-binding support would represent expected consents for about 46% principal amount of the notes.

D.F. King & Co., Inc. (212 269-5550 or 800 341-6292) is the information, tabulation and paying agent. Goldman Sachs & Co. LLC (212 902-6941 or 800 828-3182) and Credit Suisse Securities (USA) LLC, at (212 538-1862 or 800 820-1653) are the solicitation agents.

Warrior Met Coal is a Brookwood, Ala.-based metallurgical coal producer.

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