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HNRG > SEC Filings for HNRG > Form 8-K on 18-Oct-2012All Recent SEC Filings

Show all filings for HALLADOR ENERGY CO

Form 8-K for HALLADOR ENERGY CO


18-Oct-2012

Entry into a Material Definitive Agreement, Termination of a Material Definiti


Item 1.01 Entry into a Material Definitive Agreement.

Credit Agreement

On October 18, 2012, Sunrise Coal, our wholly-owned subsidiary, entered into a credit agreement (the "Credit Agreement") with PNC Bank, as administrative agent, and the lenders named therein. The Credit Agreement replaces the previous credit agreement we had with PNC.

The Credit Agreement provides for a $165 million senior secured revolving credit facility. The facility matures in five years.

The facility is collateralized by substantially all of Sunrise's assets and we are the guarantor. We will draw on the facility as needed for development of our new projects in Illinois and Indiana.

All borrowings under the Credit Agreement bear interest, at LIBOR plus 2% if the leverage ratio is less than 1.5X, LIBOR plus 2.5% if the leverage ratio is over 1.5 but less than 2X and at LIBOR plus 3% if the leverage ratio is over 2X. The leverage ratio is based on our EBITDA. The maximum leverage ratio is 2.75X. The leverage ratio is equal to funded debt/EBITDA.

The annual commitment fee is 50 BPS but falls to 37.5 BPS if we borrow more that 33% of the facility.

The Credit Agreement also imposes certain other customary restrictions as well as certain milestones we must meet in order to draw down the full amount.

The foregoing summary is qualified in its entirety by reference to the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.



Item 1.02 Termination of a Material Definitive Agreement.

In connection with entering into the Credit Agreement, we terminated the old agreement.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 of this report is incorporated by reference into this Item 2.03.



Item 3.03 Material Modification to Rights of Security Holders.

The Credit Agreement contains a covenant that, among other things, restricts Sunrise's ability to pay distributions to us which in turn could limit our ability to pay dividends.



Item 8.01 Other Events.

A copy of our October 18, 2012 press release announcing the above-referenced credit agreement is attached hereto as Exhibit 99.1 and incorporated herein by reference.




Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Credit Agreement, dated October 18, 2012

99.1 Press release dated October 18, 2012 announcing credit facility

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