Blackhawk ups spread on $660 million term loan to Libor plus 950 bps

By Sara Rosenberg

New York, Feb. 9 – Blackhawk Mining LLC lifted pricing on its $660 million five-year first-lien term loan to Libor plus 950 basis points from talk of Libor plus 800 bps to 850 bps, according to a market source.

In addition, the original issue discount on the term loan widened to 97 from 98, and the call protection was changed to non-callable for one year, then hard call protection of 103 in year two, 102 in year three and 101 in year four, from hard call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

Also, amortization on the loan was increased to 16.5% in year one and 8.5% in year two and then will return to original terms thereafter, from 12.5% in year one and 7.5% in year two, and the company will use commercially reasonable efforts to get a public rating from S&P Global Ratings and Moody’s Investors Service by Dec. 31, 2017 instead of being unrated.

The term loan still has a 1% Libor floor.

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

Jefferies Finance LLC is the lead bank on the deal.

Commitments are due at 2 p.m. ET on Friday, revised from 5 p.m. ET on Thursday, the source added.

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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