| Item 7.01. | Regulation FD Disclosure. |
Redemption of Existing Notes
On November 18, 2021, in connection with the commencement of a private offering (the “Proposed Offering”) of $350.0 million aggregate principal amount of senior secured notes due 2028 (the “Notes”) of Warrior Met Coal, Inc. (the “Company”), the Company delivered to the holders of its 8.00% senior secured notes due 2024 (the “Existing Notes”) (with a copy to Wilmington Trust, National Association, as trustee (the “Existing Notes Trustee”) for the Existing Notes) a conditional notice of optional full redemption (the “Conditional Redemption Notice”) with respect to all of the outstanding Existing Notes (the “Existing Notes Redemption”). The Company’s obligation to redeem the Existing Notes is conditioned upon the successful completion of the Proposed Offering (the “Condition Precedent”). In the Existing Notes Redemption, the Company will redeem all the Existing Notes at a cash redemption price equal to 102.000% of the principal amount thereof plus accrued and unpaid interest thereon to the scheduled redemption date of December 18, 2021 (the “Redemption Date”) (subject to satisfaction of the conditions set forth in the Conditional Redemption Notice) (the “Redemption Price”). On the closing date of the Proposed Offering, the Company intends to use all of the net proceeds from the Proposed Offering, together with cash on hand, to satisfy and discharge the indenture governing the Existing Notes (the “Existing Notes Indenture”) by making an irrevocable deposit with the Existing Notes Trustee of funds sufficient to pay the Redemption Price plus accrued and unpaid interest for the Existing Notes on the scheduled Redemption Date (approximately $353.9 million) plus any other amounts due under the Existing Notes Indenture. Following the redemption, no Existing Notes will remain outstanding.
If the Condition Precedent has been satisfied, on and after the Redemption Date, interest on the Existing Notes will cease to accrue in accordance with the Existing Notes Indenture, unless the Company defaults in paying the Redemption Price, and the only remaining right of holders of the Existing Notes will be to receive payment of the Redemption Price.
This Current Report on Form 8-K does not constitute a notice of redemption under the Existing Notes Indenture and is qualified in its entirety by reference to the Conditional Redemption Notice.
Amendment and Restatement of ABL Facility
Concurrently with the closing of the Proposed Offering, the Company expects to enter into, and has obtained commitments regarding, the Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Second Amended and Restated Credit Agreement”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders from time to time party thereto and Citibank, N.A. as administrative agent, which will amend and restate in its entirety the existing Amended and Restated Asset-Based Revolving Credit Agreement (the “ABL Facility”) and, among other things (i) extend the maturity date of the ABL Facility to the fifth anniversary date of the closing of the Proposed Offering; (ii) change the calculation of the interest rate payable on borrowings from being based on London Interbank Offered Rate to be based on Secured Overnight Financing Rate, with corresponding changes to the applicable interest rate margins with respect to such borrowings, (iii) amend certain definitions related to the calculation of the borrowing base; (iv) increase the commitments that may be used to issue letters of credit to $65.0 million; and (v) amend certain baskets contained in the covenants to conform to the baskets contained in the indenture that will govern the Notes. The Second Amended and Restated Credit Agreement will allow the Company to borrow up to $132 million through October 14, 2023, and thereafter up to $116 million through November 2026, subject to meeting borrowing base and other conditions therein. The closing of the Proposed Offering is conditioned upon the consummation of the Second Amended and Restated Credit Agreement.
Preliminary Offering Circular Disclosure
The Company is furnishing herewith the following information included in the confidential preliminary offering circular, dated November 18, 2021, relating to the Proposed Offering:
As of September 30, 2021, the Company had approximately $470.2 million available to make Restricted Payments using the Company’s Cumulative Credit basket under the Existing Notes Indenture, subject to making a Restricted Payment Offer and compliance with the Fixed Charge Coverage Ratio test of at least 2.00 to 1.00 and no default conditions as set forth in the Existing Notes Indenture.
As of November 18, 2021, the Company had approximately $58.8 million of remaining unused Declined Amounts (as defined in the Existing Notes Indenture) available to make Restricted Payments or for any other purpose not otherwise prohibited under the Existing Notes Indenture, as a result of the making of the Restricted Payment Offer (as defined in the Existing Notes Indenture) that was consummated on March 22, 2019.
The information being furnished in this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On November 18, 2021, the Company issued a press release announcing that it commenced the Proposed Offering. The Company expects to use the net proceeds of the offering of the Notes, together with cash on hand, to fund the Existing Notes Redemption, including payment of the redemption premium in connection with such redemption.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This Current Report on Form 8-K is neither an offer to sell nor a solicitation of an offer to buy any of the Notes in the Proposed Offering and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “project,” “target,” “foresee,” “should,” “would,” “could,” “potential,” or other similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements represent management’s good faith
