Peabody Energy Corp. commenced cash tender offers to purchase any and all of its $500 million in outstanding 6.0% senior secured notes due 2022 and any and all of its $500 million in outstanding 6.375% senior secured notes due 2025, as part of a refinancing initiative to accommodate the pending Powder River Basin/Colorado joint venture with Arch Coal Inc.
The company also expects the transaction to increase its financial flexibility and extend debt maturities. Peabody said in an Aug. 28 statement that it remains committed to its previously stated liquidity and gross debt targets.
In connection with the tender offers, the company is soliciting consents to proposed amendments to the indenture governing the notes that would eliminate substantially all restrictive covenants, certain events of default applicable to the notes and certain other provisions contained in the indenture; and release the collateral securing the notes and eliminate certain other related provisions contained in the indenture.
The tender offers are scheduled to expire at 11:59 p.m. ET on Sept. 25, unless extended or earlier terminated.
Holders who validly tender and do not validly withdraw their notes and provide their consents to the proposed amendments before 5 p.m. ET on Sept. 11, will be eligible to receive a total consideration of $1,032.50 per $1,000 principal amount of the 6% notes and $1,047.50 per $1,000 principal amount of the 6.375% notes. The total consideration includes $30 consent payment.
Holders can withdraw their tendered notes and revoke their consents before 5 p.m. ET on Sept. 11, unless extended.
The tender offers are subject to the satisfaction or waiver of certain conditions, including a financing condition, and a minimum of 50.1% tender condition for the 6.375% prior to the expiration time.
The initial settlement date is expected to be Sept. 17 and the final settlement date is expected to be Sept. 27.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as dealer managers for the tender offers and solicitation agents for the consent solicitations.
