Massey Energy has completed a new $355 million credit facility led by Citigroup, PNC Bank and UBS. The Richmond, Va.-based coal-mining company's prior $400 million revolver was set to expire in November 2003 and was led by Citi and PNC, said Baxter Phillips, Massey's v.p. and treasurer. "The [new] facility was completed to renew maturing facilities, for increased liquidity, an additional letter of credit capacity and to leave Massey with cash on its balance sheet," Phillips explained.
UBS approached Massey to join the new deal and was selected due to its knowledge of the coal industry, explained Phillips. He said Dieter Hoeppli, executive director of the UBS industrials group, was the point-banker for UBS. While the coal-mining company considered other banks as well, no other firms were added to the syndicate, he noted. Citi, UBS and PNC are joint lead book managers and arrangers for the credit; UBS and PNC are co-syndication agents and Citi is the administration agent, stated Phillips. Massey is potentially looking to do more business with the three banks, he noted, but he declined to elaborate.
The credit comprises a $250 million term loan due 2008 and a $105 million revolver due 2007. Advantageous conditions in the market also provided Massey with the incentive to tap the bank loan market, Phillips added. "The structure was favorable, interest rates were good and the market appetite was strong," he said. There is no initial draw on the revolver, which is priced at LIBOR plus 21/2%. The term loan is priced at LIBOR plus 31/2%.