New Asset Based Revolving Credit Facility
On May
8, 2023,
the Company, Coronado Coal
Corporation, a Delaware
corporation and wholly
owned subsidiary
of the Company,
Coronado Finance Pty
Ltd, an Australian
proprietary company
and a wholly
owned subsidiary
of the Company,
or an Australian
Borrower, Coronado
Curragh Pty Ltd,
an Australian proprietary
company and
wholly
owned
subsidiary
of
the
Company,
or
an
Australian
Borrower
and,
together
with
the
other
Australian
Borrower, the Borrowers,
and the other guarantors party
thereto, collectively with the
Company,
the Guarantors
and, together
with the
Borrowers, the
Loan Parties,
entered into
a senior
secured asset-based
revolving credit
agreement in
an initial
aggregate amount
of $
150.0
million, or
the New
ABL Facility,
with Global
Loan Agency
Services Australia
Pty Ltd,
as the
Administrative Agent,
Global Loan
Agency Services
Australia Nominees
Pty
Ltd, as the
Collateral Agent,
the Hongkong and
Shanghai Banking Corporation
Limited, Sydney
Branch, as the
Lender, and DBS Bank
Limited, Australia Branch,
as the
Lender and, together
with the other
Lender, the Lenders.
On August 3, 2023, the Company
satisfied all conditions precedent
under the New ABL Facility,
at which time it
became effective and replaced the predecessor
ABL Facility.
The New
ABL Facility
matures in
August 2026
and provides
for up
to $
150.0
million in
borrowings, including
a
$
100.0
million sublimit for the issuance
of letters of credit and $
70.0
million sublimit as a revolving
credit facility.
Availability under the New
ABL Facility is
limited to an
eligible borrowing base, determined
by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under
the New
ABL Facility
bear interest
at a
rate per
annum equal
to an
applicable rate
of
2.80
%
plus BBSY,
for loans denominated in A$, or SOFR, for loans denominated
in US$, at the Borrower’s election.
The New
ABL Facility
is guaranteed
by the
Guarantors.
Amounts outstanding
under the
New ABL
Facility are
secured by
(i) first
priority lien
in the
accounts receivable
and other
rights to
payment, inventory,
intercompany
indebtedness, certain general
intangibles and commercial tort
claims, commodities accounts,
deposit accounts,
securities accounts
and other
related assets
and proceeds
and products
of each
of the
foregoing, collectively,
the New ABL Collateral, (ii)
a second-priority lien on substantially
all of the Company’s
assets and the assets
of
the guarantors, other than the New ABL
Collateral, and (iii) solely in the case of
the obligations of the Australian
Borrower, a featherweight
floating security interest over certain
assets of the Australian Borrower,
in each case,
subject to certain customary exceptions.
The New
ABL Facility
contains customary representations
and warranties
and affirmative and
negative covenants
including, among
others, a
covenant regarding
the maintenance
of leverage
ratio to
be less
than
3.00
covenant regarding maintenance of interest coverage ratio to be more than
3.00
times, covenants relating to the
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or
any of its
Subsidiaries,
covenants
relating
to
financial
reporting,
covenants
relating
to
the
incurrence
of
liens
or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and
sales of all
or substantially all
of the Borrowers
and Guarantors’, collectively
the Loan Parties,
assets
and limitations on changes in the nature of the Loan Parties’
business.
Subject
to
customary
grace
periods
and
notice
requirements,
the
New
ABL
Facility
also
contains
customary
events of default.
Under the terms of New ABL Facility,
a Review Event (as defined in the New ABL Facility) is triggered if, among
other matters, a “change of control” (as defined in the
New ABL Facility) occurs.
Following the
occurrence of
a Review
Event, the
Borrowers must
promptly meet
and consult
in good
faith with
the Administrative Agent and the Lenders to agree a
strategy to address the relevant Review Event including but
not limited to a restructure of the terms of the New ABL Facility to the satisfaction of the Lenders
.
If at the end of
20
business days
after the
occurrence
of the
Review Event,
the Lenders
are not
satisfied
with the
result of their discussion or meeting with the Borrowers or do not wish to
continue to provide their commitments,
the Lenders may declare all amounts owing
under the ABL Facility immediately due and payable,
terminate such
Lenders’
commitments
to
make
loans
under
the
ABL
Facility,
require
the
Borrowers
to
cash
collateralize
any
letter of credit obligations and/or exercise any and all remedies
and other rights under the New ABL Facility.
To establish
the New ABL Facility, the Company incurred debt issuance costs of $
3.4
elected an accounting
policy to present debt
issuance costs incurred
before the debt liability
is recognized (e.g.
before the debt
proceeds are received)
as an asset
which will be
amortized ratably
over the term
of the facility.
The costs
will not
be subsequently
reclassified as
a direct
deduction of
the liability.
The carrying
value of
debt
issuance costs, recorded
as “Other
non-current assets” in
the unaudited Condensed
Consolidated Balance Sheet
was $
2.9
million as at September 30, 2023.
