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Cloud Peak's credit amendment

CLOUD Peak Energy Resources has amended a key finance agreement to grant itself more flexibility.

Noel Dyson
Cloud Peak's credit amendment

It has also left it with a credit document that is a bit of a mouthful – amendment no.1 to amended and restated credit agreement.

One of the key changes is to modify the existing exception to the indebtedness covenant.

It permits an aggregate of up to $100 million in debt existing with respect to newly acquired restricted subsidiaries, which is as well as debt and capital lease obligations incurred to acquire assets to also include unsecured debt within the $100 million basket.

The prior $10 million basket allowed under the indebtedness covenant for debt of foreign subsidiaries has been increased to $50 million.

The modification adds an exception to the liens covenant permitting liens securing debt of foreign subsidiaries up to an aggregate $50 million.

The general exception to the liens covenant permitting liens of up to the greater of $35 million and 3% of consolidated net tangible assets has been modified too.

The aggregate permitted amount has been increased to 12% of consolidated net tangible assets.

Also modified is the existing exception to the investment’s covenant limiting investments in entities that are not guarantors of the credit agreement.

The limitation is removed for foreign subsidiaries that are or will be restricted subsidiaries under the credit agreement.

The cumulative net income basket used to determine permitted distributions and certain permitted investments has been changed by moving the start date.

Instead of the calculation of cumulative net income being July 1, 2011, it is instead January 1, 2010.

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