The Firm represented Peabody Energy Corporation (“Peabody”) in a registered offering of $650 million aggregate principal amount of 7.375% senior notes due 2016 and $250 million aggregate principal amount of 7.875% senior notes due 2026. While Moody’s and S&P rated the notes below investment grade, Peabody was able to issue the notes with primarily investment grade covenants. The notes are guaranteed on a senior unsecured basis by all of Peabody’s domestic subsidiaries, subject to certain exceptions.
The Firm also represented Peabody in amending and restating its senior secured credit facility to provide $2.75 billion senior unsecured credit facilities consisting of a $1.8 billion revolving credit facility and a $950 million term loan facility, which includes a $510 million delayed draw sub-facility.
Peabody intends to use the net proceeds from the senior notes offering, together with the proceeds of the delayed draw term loans and a portion of the revolving credit facility, to consummate the acquisition of Excel Coal Limited, one of the largest independent coal companies in Australia.
Morgan Stanley & Co. Inc. and Lehman Brothers Inc. acted as joint book-running managers of the senior notes offering.
The Simpson Thacher team included Risë Norman, Christopher Frigon, Joshua Koenig and Melissa Heaton (Securities), Marissa Wesely, Christian Struck and Jinghua Zou (Credit), Marcy Geller, Noah Beck and Helena Wolin (Tax – Senior Notes), Kurt Dudas (Tax – Credit Facilities), Adeeb Fadil and Noreen Lavan (Environmental), Jeanne Annarumma and Carl Berry (ERISA) and J.S. Dyer (Labor). Paralegals Lindsey Cei and Brendan Derr also provided valuable assistance to the deal team.