The secured term loan will diminish the company’s revolving credit facility from $600m to $350m with the remaining net proceeds tol then finance general corporate purposes.
Currently Arch owns cash and investments worth $1.2bn and a total available liquidity of $1.4bn, as on 30 September 2012.
The company has also amended its senior secured revolving credit facility, relaxing the financial maintenance agreements until 31 December 2015.
Arch senior VP and CFO John Drexler said that the transaction enhances the firm’s cash and liquidity position while eliminating potentially restrictive financial covenants, providing greater financial flexibility in a poor market environment.
"This comprehensive financing plan also provides Arch with tools to de-lever when coal markets recover.
"While our leverage is currently above our long-term targeted range, we have no major debt maturities until 2016 and 45 percent of our outstanding debt will be pre-payable or callable within the next year," added Drexler.
