Cloud Peak Energy units price $600M senior notes

AP News
Posted: Nov 20, 2009 2:10 PM

After its public debut on Friday, Cloud Peak Energy Inc. said its subsidiaries priced two senior note offerings with a total value of $600 million.

The U.S. coal producer said that its subsidiaries Cloud Peak Energy Resources LLC and Cloud Peak Energy Finance Corp. priced an offering of $300 million of senior notes due 2017 with a coupon of 8.25 percent and an offering of $300 million of senior notes due 2019 with a coupon of 8.5 percent.

The news comes on the U.S. coal producer's first day of trading, after it priced its initial public offering below expectations.

Cloud Peak Energy Inc. sold 30.6 million shares at $15 each. It expected to price the offering between $16 per share and $18 per share.

The offering generated gross proceeds of $459 million. Underwriters can purchase up to an additional 4.6 million shares.

Previously, Denver-based Cloud Peak was a Rio Tinto subsidiary overseeing mines in a coal-rich region of the Western U.S. A little more than a year ago, London-based Rio Tinto began considering options to divest its U.S. coal mining assets forming holding company, Cloud Peak.

In an earlier statement Cloud Peak said it plans to distribute about $284.6 million of the senior note proceeds to Rio Tinto and use the remaining funds for general purposes.

Shares of the company fell 35 cents, or 2.3 percent, to $14.65 in afternoon trading.

The Late, Great USA