Daily News: May 3, 2017

HCA, Citi Provide Financing for Alpha Natural Resources


Alpha Natural Resources has paid off its term loan under the $125 million credit agreement entered into at the time of the company’s emergence from bankruptcy and entered into a new $60 million accounts receivable purchase facility with Hitachi Capital America (HCA) and a new $200 million letter of credit facility with Citibank.

Alpha CEO David Stetson said, “After reviewing our 2017 business plan, current liquidity and future needs, we decided that the best course of action was to pay off the existing term loan. The current environment for metallurgical coal, our strong cash balance and the current cost of debt all contributed to our decision to retire the term loan early. We are grateful to the lenders who stepped up to provide the term loan at the conclusion of Alpha’s bankruptcy as it was an integral part of our successful reorganization.”

The accounts receivable purchase facility with HCA will provide Alpha with up to $60 million of additional liquidity, a portion of which will be used to replenish liquidity utilized to pay off the existing term loan. The new letter of credit facility replaces the letter of credit facility previously established as part of the exit facility.

Alpha has benefitted from resurgence in the metallurgical coal market and continued strong relationships with power utility customers which, in some cases, have been in place for decades. The company has projected a production target of more than 14 million tons in 2017.

GMP Securities acted as Alpha’s investment banker in connection with the accounts receivable purchase facility. Alpha was represented by Hunton & Williams in connection with the payoff of its term loan under the exit facility and the new letter of credit facility, and by Thompson Coburn in connection with the accounts receivable purchase facility.

Kingsport, KY-based Alpha Natural Resources has affiliate mining operations in West Virginia and Kentucky and supplies metallurgical coal to the steel industry and thermal coal to generate power.