Natural Resource Partners (NRP) has expanded its $100 million revolver for possible acquisition opportunities and also could possibly go after a term loan. The increased bank commitments brought NRP's line up to $175 million with no change in the pricing or terms of the original agreement. Dwight Dunlap, NRP cfo, said the company has its sights on new acquisitions, but declined further comment on the matter. As LMW went to press NRP announced the $53 million acquisition of two subsidiaries of Alpha Natural Resources.
Regarding the company's future financing strategy, Dunlap said, "We're looking to term [the loan] out." He added, however, that the company has only just closed on the PNC Bank-led credit and that there have been no internal discussions on the subject. "We haven't explored the market opportunities at this point," he said. "We need to talk among ourselves." He did say NRP has told all its banks that they would have first opportunity at helping it put permanent financing in place. Dunlap could not specify when NRP might pursue a term loan, saying only that the company would like to take advantage of historically low interest rates.
The expanded $175 million revolver carries a spread of 11/4% to 13/4% over LIBOR, depending on the debt to EBITDA ratio. There was no extension on the maturity date of the facility, which is set to expire in March 2005.
Explaining the relationship with PNC, Dunlap noted, "PNC is one of the leading banks in the coal business and we've had a longstanding relationship with them." Three new lenders--Citigroup, Wachovia Bank and Southwest Bank of Texas--joined the original syndicate for a total of eight participants, he added. PNC has also provided financing for coal companies such as Massey Energy and Arch Coal.