Walter Energy gets lender consents needed to amend credit facility

By Marisa Wong

Madison, Wis., March 18 - Walter Energy, Inc. received the required consents to amend its $2,725,000,000 credit agreement dated April 1, 2011 from a majority of the facility's lenders, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into a sixth amendment to its credit agreement on Tuesday.

The amendment, among other things:

• Permits the company to repay the term loan A under its credit agreement without making a pro rata repayment to its existing term loan B facility;

• Extends the maturity of 81.6% of its revolving commitments to October 2017, with the extending lenders having their revolving commitments reduced by 20%;

• Provides for amendments to incurrence covenants to give the company additional flexibility;

• Eliminates the liquidity and fixed-charge coverage maintenance covenants;

• Modifies the secured leverage ratio covenant, making it apply only to the commitments of the extending revolving lenders; and

• Provides for a 50 basis point increase in the interest rate payable on the company's term loan B.

Some of the changes above are conditioned on issuance of additional junior capital in an aggregate amount of at least $350 million and repayment in full of the term loan A.

According to a previous 8-K filing, the company intends to refinance its existing term loan A at some point following the amendment process.

Walter is a Birmingham, Ala.-based pure-play metallurgical coal producer for the global steel industry.

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