Each one in plain English, with the numbers worked through for a shareholder.
11 July 2014material agreement● NeutralMajor
Walter obtained lender consent on July 7, 2014 to a Seventh Amendment of its credit agreement, which makes the financial maintenance ratio unlimited for the quarter ended June 30, 2014 provided it issues at least $275 million of additional first-lien notes within seven days (or a longer period set by the agent). On July 8 it signed an Eighth Amendment adding a $61.2 million revolver tranche maturing 2017, bringing total revolving commitments to $375 million, effective only if it prices a bond offering of at least $275 million. This continues the string of credit amendments that followed the Sixth Amendment in March.
Walter agreed to issue 3,150,000 new common shares to one noteholder in exchange for $35 million of its 9.875% senior notes due 2020, which will be retired and cancelled. No cash comes in; the company says the aim is to reduce debt and interest cost and it may do more such exchanges. For shareholders this means some dilution, and it follows the company's earlier debt-raising in 2013-2014.
On March 27, 2014 Walter issued $350.0M of 11.0%/12.0% senior secured second-lien PIK toggle notes due April 1, 2020 under a new Wilmington Trust indenture. It can pay interest all in cash at 11.0%, or part in additional notes at 12.0% on the PIK portion. It also issued a further $200.0M of its 9.500% first-lien notes due 2019 under the September 2013 indenture. All of this is secured by substantially all of its assets, with the second-lien notes ranking behind the credit agreement and first-lien notes. This appears to be the junior capital that the Sixth Amendment required, though the excerpt does not say so. The excerpt does not show the use of proceeds, and the indenture limits dividends and other payments.
On March 18, 2014 Walter obtained majority-lender consent to a Sixth Amendment of its $2.725B credit agreement. It lets Walter repay Term Loan A without repaying Term Loan B pro rata, extends 81.6% of revolver commitments to October 2017 (those lenders' commitments cut by 20%), eliminates the liquidity and fixed charge coverage covenants, modifies the secured leverage covenant, and adds 0.50% to the Term Loan B interest rate. Most changes only take effect if Walter issues at least $350M of additional junior capital and repays Term Loan A in full. This replaces the minimum liquidity covenant set in the Fifth Amendment of July 2013.
S.A.C. Capital Advisors, L.P, S.A.C. Capital Advisors, Inc, S.A.C. Capital Associates, LLC, CR Intrinsic Investors, LLC, S.A.C. Global Investors LLP, Steven A. Cohen reported a Walter Energy, Inc. shareholding of 30,697 shares (0.10% of votes) in a periodic institutional filing.
Atlas Master Fund, Ltd, Atlas Global, LLC, Atlas Global Investments, Ltd, Atlas Institutional Fund, LLC, Atlas Institutional Fund, Ltd, Atlas Institutional Fund II, LLC, Atlas Institutional Fund II, Ltd, Atlas Global Japan Unit Trust, Atlas Enhanced Master Fund, Ltd, Atlas Enhanced Fund, L.P, Atlas Enhanced Fund, Ltd, Atlas Fundamental Trading Master Fund Ltd, Atlas Fundamental Trading Fund, L.P, Atlas Fundamental Trading Fund, Ltd, Lyxor/Balyasny Atlas Enhanced Fund Limited, Balyasny Asset Management L.P, Dmitry Balyasny reported no remaining Walter Energy, Inc. shareholding in its periodic institutional filing.
Atlas Master Fund, Ltd, Atlas Global, LLC, Atlas Global Investments, Ltd, Atlas Institutional Fund, LLC, Atlas Institutional Fund, Ltd, Atlas Institutional Fund II, LLC, Atlas Institutional Fund II, Ltd, Atlas Global Japan Unit Trust, Atlas Leveraged Master Fund, Ltd, Atlas Leveraged Fund, L.P, Atlas Leveraged Fund, Ltd, Atlas Fundamental Trading Master Fund, Ltd, Atlas Fundamental Trading Fund, L.P, Atlas Fundamental Trading Fund, Ltd, Lyxor/Balyasny Atlas Enhanced Fund Limited, Balyasny Asset Management L.P, Dmitry Balyasny disclosed a new substantial Walter Energy, Inc. shareholding (5.22% of votes).
30 Sept 2013security holder rights change● NeutralMajor
On September 27, 2013 Walter issued $450.0M of 9.500% senior secured notes due October 15, 2019. They are secured on a first-priority basis by substantially all of Walter's and its guarantor subsidiaries' assets, equally with the credit agreement. Proceeds were used to buy back and extinguish $250M of Term Loan A through a Dutch auction, with the rest for general corporate purposes. The indenture limits dividends and other payments, adding to the dividend limits already in the credit agreement. This moves part of the bank debt into secured bonds and pledges the company's assets to the new noteholders.
Walter filed Amendment No. 1 to its S-4 on September 30, 2013 for the same exchange of $500M 9.875% 2020 notes and $450M 8.500% 2021 notes. The excerpt shows the same offer terms as the August filing; the visible changes are that Walter Energy Holdings, LLC is added as a co-registrant and the registration fees are marked as previously paid. The expiration date is still blank and the registration is still not yet effective.
Walter filed a registration statement (Form S-4) on August 22, 2013 to swap its privately placed $500M 9.875% notes due 2020 and $450M 8.500% notes due 2021 for identical notes registered with the SEC, which can be freely traded. This follows through on the registration-rights promise made when the notes were issued in November 2012 and March 2013; the terms stay substantially the same and no new money is raised.
On July 23, 2013 Walter signed a fifth amendment to its credit agreement. It suspends the interest coverage covenant until March 31, 2015 and the senior secured leverage covenant until June 30, 2014, adds a $225M minimum liquidity covenant and capital spending caps of $175M for 2013 and $200M for 2014, and raises interest margins by 1.0%. Consent fees totalled about $17M. Alongside it, the board cut the quarterly dividend to $0.01 per share from $0.125, citing the amendment and current met coal market conditions, payable September 6, 2013. The release names Walt Scheller as CEO and describes the global met coal market as weak, a change from Keith Calder as CEO in the prior context.
Walter closed the $450.0M 8.500% senior notes due April 15, 2021 on March 27, 2013, under an indenture with Union Bank, N.A., guaranteed by its wholly-owned domestic subsidiaries. As announced March 22, $250M of proceeds will repay credit facility debt and the rest goes to general corporate purposes. This adds to the $500M notes issued in November 2012, and carries a lower coupon than those (8.500% vs 9.875%).
S.A.C. Capital Advisors, L.P, S.A.C. Capital Advisors, Inc, S.A.C. Capital Associates, LLC, CR Intrinsic Investors, LLC, S.A.C. Global Investors LLP, Steven A. Cohen disclosed a new substantial Walter Energy, Inc. shareholding (5.40% of votes).
On March 22, 2013 Walter got majority-lender consent to a fourth amendment of its credit agreement, adding covenant flexibility if it issues unsecured notes, provided the lesser of 100% and $250M of net proceeds repays term loans. A 1.0% fee applies if a term loan B repricing occurs within six months, and Walter paid a consent fee of about $5.6M. Walter also upsized a planned senior notes offering from $350M to $450M at 8.500%, due 2021, with $250M of proceeds going to repay credit facility debt. This continues the series of credit amendments since 2012.
TIAA-CREF Investment Management, LLC, Teachers Advisors, Inc reported a Walter Energy, Inc. shareholding of 1,757,896 shares (2.81% of votes) in a periodic institutional filing.
