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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 Company’s
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
Table of Contents
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
Company’s leverage ratio, as calculated in accordance with
the credit agreement. The Company’s 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 Company’s 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 Company’s 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.
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