Alpha Natural Resources buys back $593 million notes, convertibles

New York, April 1 – Alpha Natural Resources, Inc. said it bought back a total of $593 million of its notes and convertible notes for $331 million in privately negotiated transactions.

The company repurchased $82 million principal amount of its 3.75% convertible notes due 2017, $108 million principal amount of its 9¾% senior notes due 2018, $220 million principal amount of its 6% senior notes due 2019, $68 million principal amount of its 4.875% convertible notes due 2020 and $115 million principal amount of its 6¼% senior notes due 2021, according to a news release.

Funding for the transactions, which were separate and privately negotiated, came from the issuance of $214 million of 7½% senior secured second-lien notes due 2020 and $117 million of cash on hand.

The new notes have the same terms as the 7½% notes sold in May 2014 but were issued under a separate indenture.

Alpha said the transactions reduced its net debt by $379 million and will save $21 million in annual interest.

“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,” Philip J. Cavatoni, Alpha’s executive vice president and chief financial and strategy officer, said in a news release.

“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 is a Bristol, Va., coal mining company.

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