ST. LOUIS, Jan. 29, 2021 /PRNewswire/ -- Peabody (NYSE:
BTU) announced today that it has completed its previously announced
exchange transaction following the tender of 86.86 percent of its
senior secured notes due 2022. The closing of this
transaction extends a substantial portion of Peabody's debt
maturities to December 2024,
eliminates its net leverage ratio covenant and finalizes a
four-year standstill with its surety bond
providers.
"Closing of this transaction today is a significant milestone
for the company and its many stakeholders," said Peabody President
and Chief Executive Officer Glenn
Kellow. "With the majority of our nearest term funded
debt maturities now at the end of 2024, we believe these steps
provide us with the additional flexibility needed to continue to
pursue operational improvements as well as capture potential
seaborne market improvements."
Key components of the transaction include the following:
2022 Notes Exchange Offer and
Consent Solicitation: $398.7
million of former 2022 senior secured notes were tendered by
2022 noteholders and exchanged for $195.1
million of new 8.5 percent 2024 senior secured notes issued
by Peabody, $193.9 million of new
10.0 percent 2024 senior secured notes issued by certain
subsidiaries of Peabody that indirectly own the company's
Wilpinjong mine and $13.4 million in
additional cash consideration, plus accrued and unpaid
interest.
Approximately 13 percent, or
$60.3 million, of the 2022 notes did
not participate in the exchange offer, leaving those notes as
Peabody's only funded debt currently maturing prior to December
2024. Given the level of support for the exchange offer, the
amendments to the indenture governing the 2022 notes are now
operative. As a result, the 2022 notes are now unsecured and
will no longer have the benefit of substantially all of the
restrictive covenants. The 2022 notes will continue to bear
interest at an annual rate of 6.0 percent and mature in March
2022.
In connection with the exchange,
Peabody has agreed to commence by February
13, 2021 an offer to purchase up to $22.5 million in aggregate accreted value of the
new Peabody 2024 notes at a purchase price equal to 80 percent of
the accreted value of the new 2024 notes, plus accrued and unpaid
interest, if any, to, but excluding the redemption date for the
offer to purchase.
Revolving Credit Facility
Lender Exchange: Peabody also exchanged $540 million of revolving credit facility
commitments with its revolving lenders for $206.0 million of new structurally senior term
loans under a credit agreement between the lenders and certain
subsidiaries of Peabody that indirectly own the company's
Wilpinjong mine, a new $324.0 million
senior secured letter of credit facility between the lenders and
Peabody, $10.0 million of cash
consideration and 100 basis points of exchange fees.
Following this exchange with Peabody's revolving lenders, the first
lien net leverage ratio covenant under the company's existing
credit agreement has been eliminated.
Surety Agreement: The
global surety agreement was also finalized, which substantially
reduces contingent liquidity risk by resolving outstanding
collateral requests and limiting future collateral requirements of
the sureties through the maturity date of the credit
agreement.
In line with this agreement,
Peabody posted $75 million of letters
of credit in the fourth quarter of 2020 and will post an additional
$25 million of collateral per year
beginning in 2021 through 2024 for the benefit of the sureties,
plus other amounts in accordance with the surety agreement.
Surety providers have agreed to a standstill agreement under which
they have agreed not to demand any additional collateral for
existing bonds; draw on letters of credit posted for the benefit of
themselves; or cancel, or attempt to cancel, any existing surety
bond.
Lazard served as financial advisor and Jones Day served as legal advisor to Peabody on
this transaction. Houlihan Lokey Capital, Inc. served as
financial advisor and Davis Polk
& Wardwell LLP served as legal advisor to an ad hoc group of
noteholders on this transaction. PJT Partners LP served as
financial advisor and Freshfields Bruckhaus Deringer LLP served as
legal advisor to the administrative agent under the credit
facilities on this transaction.
Peabody (NYSE: BTU) is a leading coal producer, serving
customers in more than 25 countries on six continents. We
provide essential products to fuel baseload electricity for
emerging and developed countries and create the steel needed to
build foundational infrastructure. Our commitment to
sustainability underpins our activities today and helps to shape
our strategy for the future. For further information, visit
PeabodyEnergy.com.
Contact:
Julie
Gates
314.342.4336
Forward-looking Statements
This press release contains forward-looking statements within
the meaning of the securities laws. Forward-looking statements can
be identified by the fact that they do not relate strictly to
historical or current facts. They often include words or variation
of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "projects," "forecasts,"
"targets," "would," "will," "should," "goal," "could" or "may" or
other similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events or results. All statements that address
operating performance, events, or developments that Peabody expects
will occur in the future are forward-looking statements, including
the Company's ability to consummate the Exchange Offer and Consent
Solicitation and the Company's expectations regarding future
liquidity, cash flows, mandatory debt payments and other
expenditures. They may also include estimates of sales targets,
cost savings, capital expenditures, other expense items, actions
relating to strategic initiatives, demand for the company's
products, liquidity, capital structure, market share, industry
volume, other financial items, descriptions of management's plans
or objectives for future operations and descriptions of assumptions
underlying any of the above. All forward-looking statements speak
only as of the date they are made and reflect Peabody's good faith
beliefs, assumptions and expectations, but they are not guarantees
of future performance or events. Furthermore, Peabody disclaims any
obligation to publicly update or revise any forward-looking
statement, except as required by law. By their nature,
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
suggested by the forward-looking statements. Factors that might
cause such differences include, but are not limited to, a variety
of economic, competitive and regulatory factors, many of which are
beyond Peabody's control, including the ongoing impact of the
COVID-19 pandemic and factors that are described in Peabody's
Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019, and other factors that Peabody may
describe from time to time in other filings with the SEC. You may
get such filings for free at Peabody's website at
www.peabodyenergy.com. You should understand that it is not
possible to predict or identify all such factors and, consequently,
you should not consider any such list to be a complete set of all
potential risks or uncertainties.
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SOURCE Peabody