Alpha Natural Resources, Inc. /quotes/zigman/362718/quotes/nls/anr ANR -3.98% announced today that it has amended its $1.6 billion secured credit facility enhancing its financial flexibility.
The amendment, among other revisions, provides the company with a holiday from the maximum net leverage ratio covenant of 3.75 times through 2014 in exchange for implementing a maximum net secured leverage ratio covenant of 2.50 times during such period and re-implementing a maximum net leverage ratio covenant of 4.25 times during the first quarter of 2015, which will in turn be reduced to 4.0 times during the second quarter 2015, and return to 3.75 times beginning in the third quarter 2015. The pricing grid was amended to provide an additional 50 basis points of interest to the participating banks for loans outstanding if the leverage ratio during an applicable time period exceeds 3.75 times. In addition, the amendment reduces the minimum interest coverage ratio covenant of 2.5 times by 25 basis points during the fourth quarter 2012, by an additional 25 basis points during the first quarter 2013, and returning to 2.25 times during the second quarter 2013 extending through the fourth quarter of 2013. Furthermore, a minimum liquidity requirement of $500 million will be in place during the remainder of 2012 and 2013. Alpha received unanimous support from its bank group for this amendment.
Alpha has also amended its accounts receivable securitization facility in order to relax the leverage ratio covenant in the same manner as in the secured credit facility amendment, among other revisions.
"We are pleased with our ability to proactively amend our secured credit facilities to achieve terms that further improve our financial flexibility as we continue to navigate a challenging market environment," said Frank Wood, Alpha's Chief Financial Officer.