PNC Bank and Citibank are readying a $525 million refinancing forMassey Energy. The Richmond, Va., coal producer had been discussing a new credit facility with potential lenders, aiming to close a deal before the $150 million revolving portion of its existing $400 million facility expires next month, said Phil Nichols, assistant treasurer. The expiring 364-day piece, however, has a one-year term-out option if the company is unable to refinance successfully. A bank meeting date could not be ascertained, and officials at PNC and Citibank did not return calls by press time.
Massey has drawn down approximately $275 million from the existing facility, which also consists of a $250 million revolver that matures in November 2003, Nichols noted. The new credit would refinance the company's outstanding debt, as well as provide additional capacity and support the issuance of letters of credit, he said.
The proposed facility will comprise a four-year, $275 million "B" term loan and a three-year, $250 million revolver, which has a $125 million sub-limit for standby letters of credit. Standard & Poor's has assigned the proposed facility a rating of BBB-, citing collateral shortcomings (see Credit In Focus, page 9).