Walter Energy to sell $450 million notes in two parts Wednesday

By Paul A. Harris

Portland, Ore., March 19 - Walter Energy, Inc. plans to participate in a conference call with investors at 11:30 a.m. ET Wednesday morning to discuss a proposed $450 million two-part offering of secured notes, according to a syndicate source.

The coal producer is offering a $100 million add-on to its 9½% senior secured notes due Oct. 15, 2019, callable Oct. 15, 2016 at 107.125. The original $450 million issue priced at 99.425 to yield 9 5/8% on Sept. 19, 2013.

Walter Energy is also offering $350 million of senior secured second-lien pay-in-kind toggle notes due 2020, callable in 2017. The PIK toggle notes will be payable entirely in cash interest, or in 50%/50% or 75%/25% combinations of cash interest and PIK interest.

Morgan Stanley & Co. LLC, Barclays, Citigroup Global Markets Inc., Credit Agricole CIB, Goldman Sachs & Co., J.P. Morgan Securities LLC and Scotia Capital (USA) Inc. are the joint bookrunners for the Rule 144A for life offerings.

BB&T Capital Markets, BBVA Securities Inc., BMO Securities, Comerica, Fifth Third Securities Inc., ING Financial Markets LLC, Mizuho Securities USA Inc., Natixis Securities North America Inc., Regions Securities and TD Securities (USA) LLC are the co-managers.

The Birmingham, Ala.-based pure-play metallurgical coal producer plans to use the proceeds to repay $406.6 million of its term loan A and to increase its liquidity.

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