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HALLADOR ENERGY CO FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits

September 3, 2014



Item 1.01 Entry into a Material Definitive Agreement

On August 29, 2014Sunrise Coal LLC, our wholly-owned subsidiary, closed the previously announced acquisition of Vectren Fuels (see Form 8-K filed July 8, 2014).

The purchase price was $320 million. On the same date we entered into a credit agreement with PNC Bank as administrative agent for a group of several other banks. The credit agreement allows for a $250 million revolver and a $175 million term loan. Considering the acquisition and the payment of bank fees, our current debt is $350 million. The credit facility is collateralized by substantially all of Sunrise Coal's assets and we are the guarantor.

All borrowings under the credit agreement bear interest at LIBOR plus 2.25% if the leverage ratio is less than 1X, LIBOR plus 2.5% if the leverage ratio is over 1 but less than 1.5X; LIBOR plus 2.75% if the ratio is over 1.5X but less than 2X; LIBOR plus 3% if the ratio is over 2.5X but less than 2.5X and at LIBOR plus 3.5% if the leverage ratio is over 2X (which it currently is). The maximum leverage ratio is 3.25X. The leverage ratio is equal to funded debt/EBITDA. Sunrise entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of no greater than 5% or less on 100% ($175 million) of the term loan and on $100 million of the revolver with 10% step downs each quarter commencing March 31, 2016.

The Credit Agreement also imposes certain other customary restrictions and covenants as well as certain milestones we must meet in order to draw down the full amount. The term loan requires annual amortization during the five years at 10%, 15%, 15%, 20%, 20% with a bullet at maturity.

Item 7.01 Regulation FD Disclosure

We are hosting a live audio webcast accompanied with slides and conference call at 2:00 p.m. Eastern Time on Thursday, September 4, 2014 to discuss the acquisition.

The webcast will be accessible on the company's website, at www.halladorenergy.com, under the "Presentations" tab. The telephone number for the conference call is 844-420-7670 and reference "Hallador Energy Investor Call" (conference ID 96574427).

The slide presentation is filed as an exhibit to this Form 8-K.

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Item 9.01 Financial Statements and Exhibits

Financial statements of Vectren Fuels and the related pro financial information will be filed as an exhibit to this Form 8-K on or before 75 days of August 29, 2014.

99.1 Press Release Dated August 29, 2014 99.2 Press Release Dated September 2, 2014 99.3 Slide Presentation for Webcast on September 4, 2014


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Source: Edgar Glimpses


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