Patriot secures better terms

TROUBLED company Patriot Coal has amended its Debtor in Possession Credit Agreement to improve the terms.
Patriot secures better terms Patriot secures better terms Patriot secures better terms Patriot secures better terms Patriot secures better terms

Image courtesy, Patriot Coal

Staff Reporter

In a Securities and Exchange Commission filing issued yesterday Patriot said it had secured the credit agreement amendment on August 7.

It changes the credit agreement to decrease the rate term loans under that agreement will bear interest to a per annum rate equal to the Eurocurrency Rate plus 7.75% or the base rate plus 6.75%.

Both the Euro currency and base rates are defined within the credit agreement.

Among other things, the amendment also changes the credit agreement to decrease the fee Patriot has to pay if it elects to extend the maturity date of the credit agreement to 0.25% of the aggregate revolving credit commitments and term loans outstanding on the extension date.

The credit agreement is between Patriot Coal and some of its subsidiaries with Citibank, as administrative agent, Citicorp North America, the New York branch of Barclays Bank and Bank of America as letters of credit issuers and several other lender parties.

Patriot filed for Chapter 11 bankruptcy protection on July 9 and has since received bankruptcy court approval for a $US802 million debtor-in-possession finance package.

The company blamed cancelled contracts, rising costs and plummeting coal prices for its woes. It tried reducing production but this proved to be unsuccessful.

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