Arch Coal refinanced its senior secured term loan and upsized the term loan to $300 million from the previously announced level of $250 million. The interest rate for the new term loan facility, which matures in 2024, is LIBOR plus 400 basis points with a LIBOR floor of one percent. This represents a reduction of 500 basis points from the previous facility. Proceeds – along with cash on hand – are being used to pay off Arch’s existing term loan.

“We are extremely pleased with the outcome of this transaction and with the confidence and support we have received from our capital partners,” said John W. Eaves, Arch’s chief executive officer. “Through this refinancing effort, we have reduced our projected annual interest expense by $18 million, or nearly 50%, while extending debt maturities by more than two years.”

“In addition to securing much-improved borrowing rates, we used our healthy cash position to trim debt levels by more than $25 million,” Eaves said. “We believe that managing our capital structure in a careful and prudent manner is an excellent way to protect and enhance long-term shareholder value.”

With the completion of the transaction, Arch has pro forma total indebtedness at December 31, 2016 of $337 million, comprised of the new, $300 million term loan and $37 million in equipment financing and other debt. Arch expects to end the first quarter with a cash balance in excess of its total debt.

Credit Suisse acted as administrative agent and collateral agent for the new term loan. Credit Suisse and Citigroup Global Markets acted as joint lead arrangers. Regions Capital Markets, BMO Capital Markets, Morgan Stanley Senior Funding, PNC Capital Markets and Jefferies Finance acted as joint bookrunners.

Arch Coal is a coal producer for the global steel and power generation industries.