Key EF, 36th Street Enter Lease Financing Agreement with Corsa Coal

Certain wholly owned subsidiaries of Corsa Coal entered into a senior secured revolving credit facility with KeyBank for up to $25 million. Additionally, Wilson Creek Holdings, as lessee, and Corsa entered into a lease financing agreement with Key Equipment Finance, as lessor and assignor, and 36th Street Capital Partners as assignee, for the sale and leaseback of various coal mining equipment for a funding amount of $12 million.

The new credit facilities replace the $25 million senior secured term credit facility with Sprott Resource Lending entered into on August 19, 2014, which was repaid using a portion of the proceeds from the new credit facilities.

“We are pleased to have completed this refinancing. The new credit facilities will provide additional flexibility as we continue to focus on increasing shareholder value through improved operational, financial and other strategic opportunities and also extends the maturity of our obligations. The company is focused on deleveraging our balance sheet and these new credit facilities advance that goal significantly” said Peter Merritts, Corsa CEO.

The KeyBank facility will bear interest at LIBOR plus 350 basis points or base rate plus 150 basis points and will mature on August 16, 2022. The 36th Street facility has an effective interest rate of 9.50% and a lease term of 48 months.

The agreements contain customary financial covenants. In addition to the repayment of the Sprott facility, the proceeds of the new credit facilities are expected to be used to, among other things, finance the ongoing working capital requirements of the borrowers, general corporate purposes of the borrowers and pay fees and expenses associated with the transaction.

In connection with the arrangement of the KeyBank facility, the company paid a commitment fee, upfront fee and administration fee, all of which are customary to these arrangements. In connection with the arrangement of the 36th Street facility, the company paid certain fees, all of which are customary to these arrangements.

The KeyBank facility will be secured against all now owned and after acquired tangible and intangible assets of the borrowers and the guarantor, while the 36th Street facility will be secured against the leased property.

Corsa is a coal mining company focused on the production and sales of metallurgical coal, an essential ingredient in the production of steel. Its core business is producing and selling metallurgical coal to domestic and international steel and coke producers in the Atlantic and Pacific basin markets.

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