Arch Coal, Inc. Completes Term Loan

Arch Coal, Inc. announced that it closed on a new $1.4 billion term loan that was upsized from the previously announced $1 billion due to investor interest. Separately, Arch finalized its amended senior secured revolving credit facility, as previously planned, which modifies certain financial covenants to provide incremental flexibility over the next two years. Under the terms of the agreements, the upsized term loan will reduce the revolving credit facility to $600 million from $1.0 billion. Arch intends to use the proceeds from the term loan to repurchase or redeem the outstanding Arch Western Finance $450 million senior notes due 2013, repay borrowings under existing credit facilities, pay certain expenses associated with the transaction and for general corporate purposes. Upon completion of these efforts, Arch expects to have cash on hand in excess of $500 million. The term loan will carry an interest rate of LIBOR plus 4.5% initially, and can step down to LIBOR plus 4.25% after 12 months, subject to certain conditions. The interest rate on the amended credit facility will be based on a senior secured leverage ratio, and set initially at LIBOR plus 4 percent with a 75 basis point commitment fee. The term loan will be subject to a LIBOR floor of 1.25%, while there will be no LIBOR floor on the credit facility.