Coronado Global Resources Prices $400 Million Senior Secured Notes Offering
CORONADO GLOBAL RESOURCES INC. (CRN) Share Update September 2024 Tuesday 24th
Coronado Global Resources Announces $400 Million Senior Secured Notes Offering
Coronado Global Resources Inc. (ASX: CRN) has announced the pricing of an oversubscribed offering of $400 million in senior secured notes due 2029. This move aims to refinance existing debt and support general corporate purposes.
Instant Summary:
- Coronado Global Resources prices $400 million in senior secured notes at 9.250% due 2029.
- The notes will be issued at par and guaranteed by the company and certain subsidiaries.
- Proceeds will be used to redeem existing 10.750% senior secured notes due 2026, pay related fees, and for general corporate purposes.
- The offering is expected to close on October 2, 2024, subject to customary closing conditions.
Details of the Offering
Coronado Global Resources Inc., through its wholly-owned subsidiary Coronado Finance Pty Ltd, has priced an oversubscribed offering of $400 million in senior secured notes. These notes carry an interest rate of 9.250% and are due in 2029. The notes will be issued at par and are guaranteed on a senior secured basis by the company and certain of its subsidiaries.
The notes will be secured by a first-priority lien on substantially all of the assets of the issuer and each note guarantor, excluding certain assets defined as ABL Priority Collateral. Additionally, the notes will have a second-priority lien on the ABL Priority Collateral, junior to the first-priority lien for the benefit of lenders under the company's asset-based revolving credit facility (ABL Facility).
Use of Proceeds
The proceeds from the offering will be utilized to redeem all of the issuer's outstanding 10.750% senior secured notes due 2026, pay related fees and expenses, and support general corporate purposes. The company expects the offering to close on October 2, 2024, subject to customary closing conditions.
Offering Details
The notes and related guarantees are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States without registration or an applicable exemption.
The issuance of these notes at a lower interest rate than the existing 10.750% notes due 2026 is a positive move for Coronado Global Resources. It will reduce the company's interest expenses and improve its financial flexibility. However, the high interest rate of 9.250% reflects the company's credit risk and market conditions.
Investor Reaction:
Analysts are likely to view this announcement positively, as it demonstrates Coronado's proactive approach to managing its debt. The oversubscription of the offering indicates strong investor confidence. However, the high interest rate may raise concerns about the company's creditworthiness.
Conclusion:
Investors should keep an eye on the closing of this offering and the company's subsequent financial performance. Coronado's ability to effectively manage its debt and utilize the proceeds for growth will be crucial for maintaining investor confidence.