Peabody Energy transaction support agreement and out-of-court notes exchange
12/30/2020
Davis Polk is advising an ad hoc group of noteholders holding approximately 65% of Peabody Energy’s outstanding 6.000% senior secured notes due 2022, in connection with a notes amendment and exchange with Peabody Energy. On December 24, 2020, Peabody Energy announced that it had entered into a Transaction Support Agreement with the ad hoc group and 100% of its revolving lenders and letter of credit issuers pursuant to which, among other things, the noteholders have agreed to exchange their existing notes for (i) new 10.000% Senior Secured Notes due December 31, 2024 and (ii) new 8.500% Senior Secured Notes due December 31, 2024. The revolving credit lenders have agreed to convert their existing revolving credit facility into new term loans and a letter of credit facility due in December 2024 on similar terms as the new notes. The exchange transactions are expected to close in January 2021.
 
Peabody Energy is a leading coal producer, serving customers in more than 25 countries on six continents. As of September 30, 2020, Peabody Energy owned interests in 18 active coal mining operations located in the United States and Australia. In 2019, Peabody Energy produced and sold 164.7 million and 165.5 million tons of coal, respectively, from continuing operations. 
 
The Davis Polk restructuring team includes partner Damian S. Schaible, counsel Jon Finelli and associates Adam L. Shpeen and Jarret Erickson. The capital markets team includes partner Nicholas A. Kronfeld and associates Angela Park, Jolie Yang and Jakub P. Jozwiak. The litigation team includes partner Elliot Moskowitz. The tax team includes partner Patrick E. Sigmon. All members of the Davis Polk team are based in the New York office.