Item 1.01 Entry into a Material Definitive Agreement.
Notes Offering
In connection with the previously announced offering, on December 6, 2021,
Warrior Met Coal, Inc., a Delaware corporation (the "Company"), issued
$350.0 million in aggregate principal amount of 7.875% senior secured notes due
2028 (the "Notes"). The Notes were issued under that certain indenture dated as
of December 6, 2021 (the "Indenture") by and among the Company, the direct or
indirect wholly-owned subsidiaries of the Company party thereto (the
"Guarantors") and Wilmington Trust, National Association, as trustee (the
"Trustee") and priority lien collateral agent, to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), and to certain non-U.S. persons in transactions outside the
United States in accordance with Regulation S under the Securities Act. The
Notes have not been and will not be registered under the Securities Act, and may
not be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act. As further
discussed in Item 1.02 below, the Company used the net proceeds of the offering
of the Notes, together with cash on hand, to fund the redemption of all of the
Company's outstanding 8.00% senior secured notes due 2024 (the "Existing
Notes"), including payment of the redemption premium in connection with such
redemption.
The Notes will accrue interest at a rate of 7.875% per year from December 6,
2021. Interest on the Notes will be payable on June 1 and December 1 of each
year, commencing on June 1, 2022. The Notes will mature on December 1, 2028.
At any time prior to December 1, 2024, the Company may redeem the Notes, in
whole or in part, at a price equal to 100.00% of the principal amount of the
Notes redeemed plus the Applicable Premium (as defined in the Indenture) and
accrued and unpaid interest, if any, to, but excluding, the applicable
redemption date. The Notes are redeemable at the Company's option, in whole or
in part, from time to time, on or after December 1, 2024, at redemption prices
specified in the Indenture, plus accrued and unpaid interest, if any, to, but
excluding the redemption date. At any time on or prior to December 1, 2024, the
Company may redeem up to 40% of the aggregate principal amount of the Notes with
the proceeds of certain equity offerings, at a redemption price of 107.875% of
the principal amount of the Notes, plus accrued and unpaid interest, if any, to
but excluding the redemption date. The Company is also required to make offers
to purchase the Notes (i) at a purchase price of 101.00% of the principal amount
thereof in the event it experiences specific kinds of change of control
triggering events, (ii) at a purchase price of 103.00% of the principal amount
thereof prior to making certain restricted payments, and (iii) at a purchase
price of 100.00% of the principal amount thereof in the event it makes certain
asset sales or dispositions and does not reinvest the net proceeds therefrom or
use such net proceeds to repay certain indebtedness, in each case, plus accrued
and unpaid interest, if any, to, but excluding the date of purchase.
The Notes are fully and unconditionally guaranteed, jointly and severally, on a
senior secured basis by each of the Company's direct and indirect wholly-owned
domestic restricted subsidiaries that are borrowers or guarantors under the
Company's Second Amended and Restated Credit Agreement (as defined below). The
Notes and related guarantees are, subject to exceptions and permitted liens,
secured by (i) first-priority security interests in the Notes Priority
Collateral (as defined in the Indenture), which includes, among other things,
certain material owned real properties, shares of capital stock of the
Guarantors, intellectual property, as-extracted collateral (to the extent not
constituting inventory) and certain fixed assets of the Company and the
Guarantors, which assets also secure the Second Amended and Restated Credit
Agreement on a second-priority basis, and (ii) second-priority security
interests in the ABL Priority Collateral (as defined in the Indenture), which
includes, among other things, certain accounts receivable, inventory and cash of
the Company and the Guarantors, which assets also secure the Second Amended and
Restated Credit Agreement on a first-priority basis.
The Indenture contains covenants limiting the ability of the Company and any
guarantors to, among other things, (i) incur or guarantee additional
indebtedness; (ii) pay dividends or distributions on, redeem or repurchase
capital stock and prepay subordinated debt; (iii) make investments;
(iv) consummate certain asset sales; (v) engage in transactions with affiliates;
(vi) grant or assume liens; and (vii) consolidate, merge or transfer all or
substantially all of the Company's assets. These covenants are subject to a
number of important exceptions and qualifications.
The Indenture contains customary events of default, including, among other
things, (i) failure to make required payments; (ii) failure to comply with
certain obligations, covenants or agreements; (iii) failure to pay certain other
indebtedness; (iv) occurrence of certain events of bankruptcy and insolvency;
(v) failure to pay certain judgments and (vi) certain guarantees of, or liens on
the collateral securing, the Notes cease to be in effect or enforceable. An
event of default under the Indenture will allow either the Trustee or the
holders of at least 30% in aggregate principal amount of the Notes to cause the
principal of, premium, if any, and accrued but unpaid interest on all the Notes
to accelerate or, in certain cases, will automatically cause the acceleration of
the amounts due under Notes.
The foregoing description of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the full text of the Indenture, a
copy of which is attached hereto as Exhibit 4.1 and incorporated herein by
reference.
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Second Amended and Restated Asset-Based Revolving Credit Agreement
On December 6, 2021, the Company entered into that certain 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 amends
and restates in its entirety the existing Amended and Restated Asset-Based
Revolving Credit Agreement (the "ABL Facility"). The Second Amended and Restated
Credit Agreement, among other things, (i) extends the maturity date of the ABL
Facility to December 6, 2026; (ii) changes the calculation of the interest rate
payable on borrowings from being based on London Inter-Bank 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) amends
certain definitions related to the calculation of the borrowing base;
(iv) increases the commitments that may be used to issue letters of credit to
. . .
Item 1.02 Termination of a Material Definitive Agreement.
On November 18, 2021, the Company delivered to the holders of its 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, electing to redeem (the "Redemption") $343,435,000 in
aggregate principal amount of the Existing Notes, which represents all Existing
Notes that will be outstanding as of the Redemption Date (as defined below). In
connection therewith, on December 6, 2021, the Company irrevocably deposited or
caused to be deposited with the Existing Notes Trustee funds in an amount
sufficient to redeem the entire outstanding aggregate principal amount of the
Existing Notes outstanding on December 18, 2021 (the "Redemption Date") at the
redemption price (expressed as a percentage of principal amount) equal to
102.000% of the principal amount, plus accrued and unpaid interest to, but
excluding, the Redemption Date (the "Redemption Payment"). On December 6, 2021,
as a result of such deposit of the Redemption Payment and the satisfaction of
certain other requirements, the indenture governing the Existing Notes was fully
satisfied and discharged and the collateral securing the Existing Notes was
released. The Existing Notes, which bore interest at 8.00% per year, were
scheduled to mature on November 1, 2024.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 above is incorporated by reference into this Item
2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Exhibit Description
4.1 Indenture, dated as of December 6, 2021, by and among Warrior Met
Coal, Inc., the Subsidiary Guarantors party thereto from time to time
and Wilmington Trust, National Association, as trustee and as priority
lien collateral agent
10.1 Second Amended and Restated Asset-Based Revolving Credit Agreement,
dated as of December 6, 2021, by and among Warrior Met Coal, Inc. and
certain of its subsidiaries, as borrower, the guarantors party
thereto, the lenders party thereto and Citibank, N.A., as
administrative agent
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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WARRIOR MET COAL, INC. 
