Blackhawk Mining to launch $660 million term loan on Tuesday

By Sara Rosenberg

New York, Jan. 30 – Blackhawk Mining LLC will hold a bank meeting at 10:30 a.m. ET in New York on Tuesday to launch a $660 million five-year first-lien term loan, according to a market source.

Jefferies Finance LLC is the lead bank on the deal.

The term loan has hard call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

Covenants include a net first-lien leverage ratio and maximum capital expenditures.

Mandatory prepayments are 100% of debt and asset sale proceeds, and an annual excess cash flow sweep starting at 85% in 2017, with leverage based step-downs to 75%, 50% and 25% thereafter.

Amortization is 12.5% in year one, 7.5% in year two and 5% per annum thereafter, the source continued.

Proceeds will be used to refinance existing ABL-A and ABL-B facilities, legacy Blackhawk debt, a first-lien term loan and a 1.5-lien term loan, to cash collateralize letters of credit and to pay fees and expenses.

Blackhawk Mining is a Lexington, Ky.-based producer of coal, operating nine active coal mining complexes in West Virginia and Kentucky.

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