Westmoreland Coal launches $130 million 10¾% secured notes offering

By Paul A. Harris

Portland, Ore., Jan. 17 - Westmoreland Coal Co. kicked off a $130 million offering of 10¾% senior secured notes due Feb. 1, 2018 on Tuesday, according to an informed source.

The roadshow wraps up on Friday.

Gleacher & Co. Securities Inc. has the books for the Rule 144A with registration rights deal.

The notes are expected to come with terms similar to those of the existing 10¾% notes with the same maturity. That issue, sized $150 million, priced at 95 to yield 11.82% in February 2011.

The first call is Feb. 1, 2015 at 103.583. Also there is a 35% equity clawback at 110.75 until Feb. 1, 2015.

The Englewood, Colo.-based independent coal company expects to use the proceeds, together with cash on hand, to finance the $74.4 million acquisition of the Kemmerer Mine and to provide $32 million of reclamation bonding collateral, with any remaining proceeds to fund initial Kemmerer working capital.

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