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Peabody Launches Process To Refinance Existing Term Loan And Revolving Credit Facilities.

ST. LOUIS-Peabody (NYSE: BTU) has announced that it has launched a process to refinance its loan and revolver with larger facilities to accommodate the pending PRB/Colorado joint venture with Arch Coal, increase financial flexibility, extend debt maturities and increase pre-payable debt as part of the company’s previously announced comprehensive refinancing initiative. The company remains committed to its previously stated liquidity and gross debt targets.

A portion of the net proceeds from the refinancing initiative may be used to finance Peabody’s pending tender offer for its outstanding 6.000% senior secured notes due 2022 and 6.375% senior secured notes due 2025. There can be no assurance that Peabody will be successful in the refinancing initiative, which is subject to market conditions and other customary factors.

In relation to the refinancing activities, Peabody also confirmed full-year 2019 guidance targets disclosed on July 31, 2019, while citing several external factors that are expected to affect third quarter 2019 results and positioning within the full-year targeted ranges.

For the full year of 2019, recent trends suggest capital expenditures and seaborne coal volumes are expected to come at the lower end of the targeted annual range, with metallurgical coal costs now expected at the higher end of the annual range.

Peabody Coppabella Mine- Australia

The company now expects third quarter results to be materially lower than second quarter performance. Factors affecting performance include firstly a significant delay in resuming and then ramping up production at the independently operated Middlemount joint venture mine in Queensland following a highwall failure and fatality in late June, which is expected to lead to third quarter earnings for Peabody’s share of the joint venture $30 million to $35 million lower than second quarter earnings. Middlemount restarted operations in August in a new area of the mine, with shipments resuming recently. Secondly, reduced pricing on seaborne met and thermal coal, with seaborne prices lower than second quarter average prices; and thirdly demand-driven deferrals on seaborne thermal and met coal shipments, with third quarter met coal volumes now expected to be modestly below second quarter levels.

Peabody now targets fourth quarter 2019 seaborne volumes and costs substantially better than expected third quarter performance.

Metropolitan Mine Site


According to Peabody, this is not an offer to purchase or sell, a solicitation of an offer to purchase or sell or a solicitation of consents with respect to any securities. The tender offers for the company’s outstanding senior secured notes are being made solely by the Offer to Purchase and Consent Solicitation Statement.  The tender offers are not being made to holders of notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

About Peabody

Peabody is the leading global pure-play coal company and a member of the Fortune 500, serving power and steel customers in more than 25 countries on six continents. The company offers significant scale, high-quality assets, and diversity in geography and products. Peabody is guided by seven core values: safety, customer focus, leadership, people, excellence, integrity and sustainability.

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