Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
CONSOL Energy Inc. ("CONSOL Energy" or the "Company") as borrower and certain of
its subsidiaries as guarantor loan parties entered into a new Amended and
Restated Credit Agreement dated as of June 18, 2014 (the "Credit Agreement") for
a $2.0 billion senior secured revolving credit facility with certain lenders,
PNC Bank, National Association as administrative agent, Bank of America, N.A. as
syndication agent, Credit Suisse AG and JPMorgan Chase Bank, N.A., as
co-documentation agents and PNC Capital Markets LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and J.P. Morgan
Securities LLC as joint lead arrangers and joint bookrunners. The new senior
secured revolving credit facility replaced the Company's existing $1.0 billion
senior secured revolving credit facility which had been entered into as of
April 12, 2011 and amended and restated on December 5, 2013 (together with all
amendments, supplements and modifications thereto, the "Old CONSOL Facility")
and the existing $1.0 billion senior secured revolving credit facility of CNX
Gas Corporation and its subsidiaries that had been entered into as of April 12,
2011 (together with all amendments, supplements and modifications thereto, the
"Old CNX Gas Facility"). A copy of the Credit Agreement is filed as Exhibit 10.1
hereto, and is incorporated herein by reference. The description of the Credit
Agreement in this Form 8-K is a summary and is qualified in its entirety by the
terms of the Credit Agreement.
The Credit Agreement provides for a secured revolving credit facility (the
"Credit Facility") in an aggregate outstanding principal amount of up to $2.0
billion, including borrowings and letters of credit. In addition to refinancing
all outstanding amounts under the Old CONSOL Facility and Old CNX Gas Facility,
borrowings under the Credit Facility may be used by CONSOL Energy for general
The availability under the Credit Facility, including availability for letters
of credit, is generally limited to a borrowing base, which is determined by the
required number of lenders in good faith by calculating a loan value of the
Company's proved reserves.
Interest on outstanding indebtedness under the Credit Facility currently
accrues, at the Company's option, at a rate based on either:
• the highest of (i) PNC Bank, National Association's prime rate, (ii) the
federal funds open rate plus 0.50%, and (iii) the daily LIBOR rate plus
1.0%, in each case, plus a margin ranging from 0.50% to 1.50%; or
• the LIBOR rate plus a margin ranging from 1.50% to 2.50%.
The Credit Facility matures on June 18, 2019
, and requires compliance with
conditions precedent that must be satisfied prior to any borrowing as well as
ongoing compliance with certain affirmative and negative covenants to which
and certain of its subsidiaries must adhere.
The affirmative covenants include, among others: (i) preservation of existence;
(ii) payment of obligations, including taxes; (iii) maintenance of properties,
insurance, leases, books and records, coal supply agreements and material
contracts; (iv) compliance with laws; (v) use of proceeds; (vi) subordination of
intercompany loans; (vii) anti-terrorism laws; and (viii) collateral.
The negative covenants of the Credit Facility include restrictions on the
ability of CONSOL Energy
and its subsidiary guarantors except in certain
circumstances to: (i) create, incur, assume or suffer to exist indebtedness;
(ii) create or permit to exist liens on their properties; (iii) prepay certain
indebtedness unless there is no default or event of default under the Credit
Facility; (iv) make or pay any dividends or distributions in excess of certain
amounts; (v) merge with or into another person, liquidate or dissolve; or
acquire all or substantially all of the assets of any going concern or going
line of business or acquire all or a substantial portion of another person's
assets unless certain financial ratios can be met; (vi) make particular
investments and loans; (vii) sell, transfer, convey, assign or dispose of its
assets or properties other than in the ordinary course of business and other
select instances; (viii) deal with any affiliate except in the ordinary course
of business on terms no less favorable to CONSOL Energy
than it would otherwise
receive in an arm's length transaction; (ix) other than CONSOL Energy
additional equity to any person other than CONSOL Energy
or certain of its
subsidiaries (x) amend in any material manner its certificate of incorporation,
bylaws, or other organizational documents without giving prior notice to the
lenders and, in some case, obtaining the consent of the lenders. In addition,
the Company is obligated to maintain at the end of each fiscal quarter (x) an
interest coverage ratio of at least 2.5 to 1.0; and (y) a minimum current ratio
of at least 1.0 to 1.0; both as calculated in accordance with the terms and
definitions determining such ratios contained in Credit Agreement. The Credit
Agreement also contains various reporting requirements.
The Credit Facility also contains customary events of default, including, but
not limited to, a cross-default to certain other debt, breaches of
representations and warranties, change of control events and breaches of
The obligations under the Credit Agreement are secured by substantially all of
the assets of the Company and its subsidiaries pursuant to the Amended and
Restated Security Agreement, the Amended and Restated Patent, Trademark and
Copyright Security Agreement and various mortgages.
The descriptions set forth above are not complete and are subject to and
qualified in their entirety by reference to the complete text of the Credit
Agreement, a copy of which are filed herewith as an exhibit and the terms of
which are incorporated by reference.
The Credit Agreement is being filed herewith solely to provide investors and
security holders with information regarding its terms. It is not intended to be
a source of financial, business or operational information about CONSOL Energy
or any of its subsidiaries or affiliates. The representations, warranties and
covenants contained in the Credit Agreement are made solely for purposes of
those agreements and are made as of specific dates; are solely for the benefit
of the parties thereto; may be made for the purpose of allocating contractual
risk between the parties instead of establishing matters as facts; and may be
subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors or security holders. Investors and
security holders should not rely on the representations, warranties and
covenants or any description thereof as characterizations of the actual state of
facts or condition of CONSOL Energy
or any of its subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations,
warranties and covenants may change after the date of the Credit Agreement,
which subsequent information may or may not be fully reflected in public
Item 9.01. Financial Statements and Exhibits.
Exhibit Number Description of the Exhibit
10.1* Amended and Restated Credit Agreement dated as of June 18,
2014, among CONSOL Energy Inc., certain of its subsidiaries
and the lender parties thereto.
* To be filed by amendment.