ITEM 7.01. REGULATION FD DISCLOSURE.
On May 29, 2024, Alliance Resource Partners, L.P. (the "Partnership") announced that Alliance Resource Operating Partners, L.P. (the "Intermediate Partnership"), a subsidiary of the Partnership, and the Intermediate Partnership’s wholly owned subsidiary, Alliance Resource Finance Corporation, subject to market conditions, intend to offer $400.0 million in aggregate principal amount of senior unsecured notes due 2029 in a private placement to eligible purchasers (the "Notes Offering").
A copy of the press release announcing the Notes Offering is attached hereto as Exhibit 99.1 and incorporated herein by reference.
In connection with the Notes Offering, the Partnership disclosed certain information to prospective investors in a preliminary offering memorandum dated May 29, 2024 (the "Preliminary Offering Memorandum"). Pursuant to Regulation FD, the Partnership is furnishing the following information as disclosed in the Preliminary Offering Memorandum:
Amendment to Credit Agreement
On January 13, 2023, the Partnership’s subsidiary, Alliance Coal, LLC ("Alliance Coal") entered into the Credit Agreement with various financial institutions (as amended from time to time, the "Credit Agreement"). The Credit Agreement provides for a $425.0 million revolving credit facility, including a sublimit of $15.0 million for swingline borrowings (the "Revolving Credit Facility"), and permits the issuance of letters of credit of up to the full amount of $425 million, and for a term loan in an aggregate principal amount of $75.0 million (the "Term Loan").
In connection with the consummation of this offering, Alliance Coal and the financial institutions party thereto will enter in an amendment to the Credit Agreement to provide, among other things, for the following:
| ● | Extend the maturity of the financings under the Credit Agreement by one year to March 9, 2028; |
| ● | The principal of the Term Loan be paid in quarterly installments equal to 6.25% of its current outstanding balance of $56.3 million; |
| ● | The addition of an incremental facility permitting Alliance Coal at a future date to increase the Revolving Credit Facility and Term Loan by up to an aggregate of $100.0 million, subject to lenders agreeing to participate in such incremental facility; |
| ● | Alliance Coal and its subsidiaries that are guarantors under the Credit Agreement being permitted to guarantee up to $600.0 million of unsecured debt of the Partnership or the Intermediate Partnership, including the senior unsecured notes to be issued pursuant to the Notes Offering. As long as there is no continuing default under the Credit Agreement, Alliance Coal would be permitted to pay cash distributions to the Intermediate Partnership to fund interest payments on such unsecured debt of the Partnership and the Intermediate Partnership; |
| ● | Alliance Coal would be restricted from the payment of other cash distributions if such payment would result in the debt of Alliance Coal to cash flow ratio being more than 1.0 to 1.0 or Alliance Coal having liquidity of less than $200 million; and |
| ● | Revise the definition of "Change of Control." |
Preliminary April Operating Information
The Partnership’s coal sales volumes in April 2024 declined by 15.0% to approximately 2.4 million tons compared to approximately 2.9 million tons in April 2023. In the Illinois Basin, coal sales volumes for April 2024 remained relatively consistent in the Illinois Basin compared to April 2023, as lower volumes at the Partnership’s River View complex due to high river levels slowing barge traffic were almost entirely offset by increased volumes at the Partnership’s Gibson South complex due to spot export sales. In Appalachia, coal sales volumes decreased by 48.2% compared to April 2023, primarily resulting from 10 shipping lost days as a direct result of high-water events that impacted loading at the Partnership’s Tunnel Ridge complex as well as deferred shipments resulting from the Francis Scott Key Bridge collapse. The Partnership’s production was not impacted by these high-water events and the Partnership continued its mining activities without interruption. In total, volumes deferred at the River View and Tunnel Ridge complexes as a result of
