Ohio-based coal producer Oxford Resource Partners LP (NYSE: OXF) said June 25 that it has successfully completed a refinancing of its credit facilities that significantly enhances its financial flexibility and puts it in a stronger position to participate in a coal market rebound.
Oxford has closed on $175m of new credit facilities that replace its previous term loan and revolving credit facility, thereby extending the maturity profile of its debt and increasing availability under its revolver. The new facilities, which are secured by substantially all of its assets and its wholly owned subsidiaries, consist of a first lien $75m term loan and $25m revolving credit facility arranged by Cerberus Capital Management LP, and a second lien $75m term loan arranged by Tennenbaum Capital Partners LLC.
Oxford’s President and CEO Charles Ungurean said: “I am pleased that we have closed on these new credit facilities which replace our maturing revolver and term loan credit facility. By extending the maturity profile of our debt and increasing availability under our revolver, we have significantly enhanced our liquidity as we continue to focus on increasing productivity across our operations.”
The net proceeds of the new facilities are being used to retire both the existing revolving credit facility maturing next month and the existing term loan maturing in July 2014, to pay related fees and expenses and for general corporate purposes.
The new first lien facility matures in August 2015 with an optional extension to May 2016 if certain conditions are met. The new second lien facility matures in December 2015 with an optional extension to September 2016 if certain conditions are met.
Oxford is a low-cost producer of high-value steam coal in Northern Appalachia and western Kentucky, though it has largely closed out its operations in western Kentucky due to poor markets. Oxford markets its coal primarily to large electric utilities with coal-fired, baseload scrubbed power plants under long-term sales contracts. A main customer in Ohio is the Conesville power plant, located near many of Oxford’s Ohio strip mines.
Established in 1992, Cerberus Capital Management is one of the world’s leading private investment firms. Cerberus has more than $20bn under management invested in four primary strategies: distressed securities and assets, control and non-control private equity, commercial mid-market lending, and real estate-related investments.
Tennenbaum Capital Partners is a Los Angeles-based, alternative investment management firm focused primarily on middle-market credit opportunities.