TORONTO (miningweekly.com) – US coal producer Alpha Natural Resources has reduced its total debt by about $379-million, after it successfully completed the repurchase of various notes.
Alpha bought back about $593-million in principal amount of its unsecured notes in separate privately negotiated transactions with investors. This included the $82-million principal amount of its 3.75% convertible notes due 2017, the $108-million principal amount of its 9.75% senior notes due 2018, the $220-million principal amount of its 6% senior notes due 2019, the $68-million principal amount of its 4.875% convertible notes due 2020 and the $115-million principal amount of its 6.25% senior notes due 2021.
Alpha funded the total transaction costs of about $331-million through a combination of proceeds from issuing a $214-million principal amount of 7.5% senior secured second lien notes due 2020 (Series B) and with $117-million of cash on hand.
The transactions resulted in Alpha reducing its consolidated net indebtedness by about $379-million and reduced Alpha's expected annual cash paid for interest by about $21-million.
As a result of the transactions, Alpha was revising its guidance for 2015 cash paid for interest from a range of $245-million to $255-million to a range of $230-million to $240-million.
"The transactions announced today illustrate Alpha's continuing ability to take advantage of opportunities in the financial markets to proactively strengthen the company's balance sheet. We were able to achieve a meaningful deleveraging of our balance sheet while reducing cash interest payments.
“These steps increase our financial flexibility as we continue to manage through ongoing challenges in the domestic and international coal markets,” Alpha’s executive VP and chief financial and strategy officer Philip Cavatoni said.
As at December 31, Alpha had about $3.9-billion in long-term debt.