Peabody Energy announces successful consent bid, early tender results for 6%, 6 3/8% notes

By Wendy Van Sickle

Columbus, Ohio, Sept. 11 – Peabody Energy Corp. said it received requisite consents by the consent deadline in its cash tender offers to purchase any and all of its $500 million of outstanding 6% senior secured notes due 2022 and any and all of its $500 million of outstanding 6 3/8% senior secured notes due 2025, according to a news release.

Specifically, by the consent deadline, 5 p.m. ET on Sept. 11, Peabody had received tenders and consents from holders of about $495.3 million, or 99.06%, of the 6% notes and about $481 million, or 96.21%, of the 6 3/8% notes.

Under the consent solicitations, Peabody was asking for holder approval to amend each indenture to eliminate substantially all restrictive covenants, certain events of default and certain other provisions and to release the collateral securing the notes and eliminate certain other related provisions.

On Wednesday, Peabody executed supplemental indentures effecting those changes.

Peabody announced the offers on Aug. 28, subject to market conditions, as part of a refinancing initiative to accommodate the pending PRB/Colorado joint venture with Arch Coal, as well as to increase the company’s financial flexibility and extend debt maturities.

For the 2022 notes, the total purchase price will be $1,032.50 for each $1,000 principal amount of notes.

For the 2025 notes, the total purchase price will be $1,047.50 for each $1,000 principal amount of notes.

For each series, the total amount includes a consent payment of $30.00 per $1,000 of notes that will be paid only to holders who tendered their notes by the deadline for the consent solicitation.

Initial settlement is expected to take place on or before Sept. 27.

The final deadline is 11:59 p.m. ET on Sept. 25, with final settlement also expected on Sept. 27.

Holders could not tender their notes without delivering consents or deliver consents without tendering their notes.

The consent solicitations required approval from holders of a majority in principal amount of a series for passage, except those changes related to releasing collateral, which required approval from holders of 66 2/3% in principal amount of a series.

The offers are subject to a financing condition, which the company expects to satisfy through a combination of long-term senior secured debt and long-term senior unsecured debt; Peabody said that it may, however, elect to incur alternative debt financing, subject to market conditions.

For the 2025 notes, there is a minimum tender condition of 50.1% of the outstanding notes.

The information agent is Global Bondholder Services Corp. (866 807-2200, 212 430-3774 or contact@gbsc-usa.com).

Goldman Sachs & Co. LLC (212 902-6941 or 800 828-318207) and J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) are the dealer managers.

Peabody is a St. Louis-based coal producer.

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