The amendment relaxes the financial covenants under the credit agreement based on earnings before interest, tax, depreciation and amortisation.

This reduces the requirement for the company to maintain a ratio of EBITDA to consolidated net cash interest expense from equal to or greater than 2:1 to equal to or greater than 1.5:1.

It also increases the ratio of senior secured funded debt less unrestricted cash and marketable securities to EBITDA from equal to or less than 4:1 from September 30, 2014 to maturity from 3:1 through to December 31, 2015; 2.75:1 from January 1, 2016 to December 31, 2016; and 2.5:1 from January 1, 2017 to maturity.

Cloud Peak energy executive vice-president and chief financial officer Michael Barrett said the company was pleased to have relaxed the financial covenants under its credit facility.

“This amendment demonstrates our continued focus on actively managing our balance sheet and provides additional financial flexibility,” he said.

On September 5, Cloud Peak entered into the first amendment to the credit agreement, which amends its February 21 agreement.

PNC Bank National Association is administrative agent for the agreement.