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Peabody: Consent Solicitations for senior secured notes begin

Published by , Assistant Editor
World Coal,

Yesterday, leading global private sector coal company Peabody announced the start of solicitations of consents (the Consent Solicitations) to amend the indenture governing its 6.000% senior secured notes due 2022 (CUSIP Nos. 70457L AA2 and U7049L AA6; ISIN No. USU7049LAA62) and 6.375% senior secured notes due 2025 (CUSIP Nos. 70457L AB0 and U7049L AB4; ISIN No. USU7049LAB46).

The Consent Solicitations are reportedly being made in accordance with the terms and subject to the conditions set forth in a Consent Solicitation statement dated 30 July 2018, to holders of record as of 30 July 2018. The Consent Solicitations are due to expire at 5:00 p.m., New York City time, on 10 August 2018, unless extended.

The proposed amendments to the indenture governing the Notes (the Indenture) would:

  1. amend the "Restricted Payments" covenant contained in Section 4.07 of the indenture to permit an additional category of permitted restricted payments at any time not to exceed the sum of (x) US$650.0 million, and (y) US$150.0 million per calendar year, commencing with calendar year 2019, with unused amounts in any calendar year carrying forward to and available for Restricted Payments in any subsequent calendar year, and
  2. amend the "Corporate Existence" covenant contained in Section 4.13 of the indenture to permit the company's senior management to make certain determinations regarding the maintenance of the corporate existence of the company's Restricted Subsidiaries. Except for the foregoing, all the existing terms of the Notes will remain unchanged. 

According to Peabody, holders who validly deliver and do not validly revoke consents prior to the expiration time will obtain a consent fee of US$10.00 in cash per US$1000.00 principal amount of 6.000% Senior Secured Notes due 2022 or US$30.00 in cash per US$1000 principal amount of 6.375% Senior Secured Notes due 2025, subject to the receipt of the requisite consents described below.

Holders of Notes that do not consent prior to the expiration time will not receive the applicable consent fee.

The applicable consent fee will be paid to consenting holders promptly after the expiration time, subject to the receipt of the requisite consents prior to the expiration time, the execution and effectiveness of the supplemental indenture effecting the Proposed Amendments and other customary conditions described in the Consent Solicitation Statement. The company is soliciting consents as a single proposal from Holders of at least a majority in aggregate principal amount of the outstanding Notes of each series. Accordingly, adoption of the proposed amendments will require the consent of Holders of at least a majority in aggregate principal amount of the Notes of each series outstanding as of the Record Date, with the notes of each series voting separately as a class.

The company has reportedly retained J.P. Morgan Securities LLC to act as Solicitation Agent in connection with the Consent Solicitations. Questions about the Consent Solicitations may be directed to J.P. Morgan Securities LLC at (866) 834-4666 (toll free) or (212) 834-3260 (collect).

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