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May 8, 2013 /PRNewswire/ -- Alpha Natural Resources, Inc. (NYSE: ANR) ("Alpha"), a leading U.S. coal supplier, today announced the pricing of its underwritten public offering of
$300 million aggregate principal amount of 3.75% convertible senior notes due 2017. In addition, in connection with this offering, Alpha has granted the underwriters an over-allotment option to purchase up to an aggregate principal amount of
$45 million of additional notes on the same terms and conditions. The offering is expected to close on
May 13, 2013, subject to customary closing conditions.
The notes will be guaranteed on a senior unsecured basis by each of Alpha's current and future wholly-owned domestic subsidiaries that guarantee Alpha's obligations under Alpha's 9.75% senior notes due 2018 and will pay interest semiannually in arrears on
June 15 and
December 15 of each year, beginning on
December 15, 2013, at a rate of 3.75% per year, and will mature on
December 15, 2017.
The notes will be convertible by the holders beginning on
October 15, 2017, or earlier upon the occurrence of certain events. The notes will be convertible at an initial conversion rate of 99.0589 shares per
$1,000 principal amount of notes, equivalent to an initial conversion price of approximately
$10.10 per share. The initial conversion price represents a premium of approximately 50% to the
$6.73 per share closing price of Alpha's common stock on the New York Stock Exchange on
May 7, 2013. The conversion rate will be subject to adjustment upon certain events. Upon conversion, the notes may be settled, at Alpha's election, in cash, shares of Alpha common stock, or a combination thereof.
Alpha estimates the net proceeds from the issuance and the sale of the notes, after deducting underwriting discounts but before estimated offering expenses, will be approximately
$335 million. Alpha intends to use the net proceeds, together with approximately
$65 million of cash on hand assuming the over-allotment option is exercised in full, to fund purchases of approximately
$181 million of the Company's 2.375% convertible notes due 2015 and
$226 million of the 3.25% convertible notes due 2015 issued by Massey Energy Company, a wholly owned subsidiary of Alpha. Any net proceeds from this offering remaining, including if the purchases are not consummated, are intended to be used for general corporate purposes.
Barclays, J.P. Morgan, BofA Merrill Lynch, Citigroup, Morgan Stanley, BMO Capital Markets and Deutsche Bank Securities are acting as joint book-running managers in connection with this offering.