This excerpt taken from the ACI 10-K filed Mar 1, 2010.
Credit Facilities and Availability
The Company maintains a secured credit facility. On August 27, 2009, the Company entered into an amendment that extended the maturity of the credit facility from June 23, 2011 to March 31, 2013 and increased the Companys borrowing capacity from $800.0 million to $860.0 million until June 23, 2011, when it will then decrease to $762.5 million. New banks may join the credit facility after June 23, 2011, subject to an aggregate maximum borrowing amount of $800.0 million. The amendment also increased the maximum
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
leverage ratio, as defined, that the Company must maintain. A March 6, 2009, amendment amended certain covenants to make them less restrictive, including those related to lien creation, restricted payments and subsidiary guarantees of debt, in addition to an increase in the maximum leverage ratio, as defined, that the Company must maintain.
Borrowings under the credit facility bear interest at a floating rate based on LIBOR determined by reference to the Companys leverage ratio, as calculated in accordance with the credit agreement. The Companys credit facility is secured by substantially all of its assets as well as its ownership interests in substantially all of its subsidiaries, except its ownership interests in Arch Western and its subsidiaries. As of December 31, 2009, the weighted-average interest rate of the Companys outstanding borrowings under the credit facility was 3.49%. Commitment fees, of 0.50% per annum, are payable on the average unused daily balance of the revolving credit facility. Financial covenant requirements may restrict the amount of unused capacity available to the Company for borrowings and letters of credit.
The Company maintains an accounts receivable securitization program under which eligible trade receivables are sold, without recourse, to a multi-seller, asset-backed commercial paper conduit. The entity through which these receivables are sold is consolidated into the Companys financial statements. The Company may borrow and draw letters of credit against the facility, and pays facility fees, program fees and letter of credit fees (based on amounts of outstanding letters of credit) at rates that vary with our leverage ratio, as defined under the program. On May 22, 2008, the Company entered into an amendment to its accounts receivable securitization program that increased the size of the program from $150.0 million to $175.0 million. On March 31, 2009, the Company entered into an amendment to its accounts receivable securitization program that revised certain terms to strengthen the credit quality of the pool of receivables and increased the interest rate. The size of the program continues to allow for aggregate borrowings and letters of credit of up to $175.0 million, as limited by eligible accounts receivable.
Available borrowing capacity is based on the allowable amount of accounts receivable as defined under the terms of the agreement. The credit facility supporting the borrowings under the program is subject to renewal annually and expires March 31, 2010. The interest rate in effect as of December 31, 2009 was 1.06%.
As of December 31, 2009 and 2008, the Company had borrowings of $120.0 million and $205.0 million, respectively, outstanding under the credit facility. At December 31, 2009, the Company had $740.0 million of unused available borrowing capacity under the revolving credit facility. The Company had borrowings of $84.0 million and $68.6 million under the accounts receivable securitization program at December 31, 2009 and 2008, respectively. The Company also had letters of credit under the securitization program of $64.5 million as of December 31, 2009. At December 31, 2009, the Company had no available borrowing capacity under the accounts receivable securitization program.