The company announced on November 13 that it had commenced a private offering of $350 million worth of senior notes due in 2019, guaranteed by the Arch subsidiaries that guarantee indebtedness under the company’s existing senior secured credit facility.

It told the market a day later that it had upped the offering to $375 million and was pricing the notes at 9.875% at an issue price of 95.934%. This would result in a yield to maturity of 10.75%.

Arch said it would pay interest on the notes on June 15 and December 15 of each year beginning on June 15, 2013.

The thermal and metallurgical coal producer also announced on November 13 that it had launched a $250 million incremental, senior secured term loan due in 2018.

The loan is pursuant to an uncommitted accordion provision in the company’s existing revolving credit agreement.

Completion of the term loan offering would cut the company’s revolving credit facility from $600 million to $300 million.

It plans to use the net proceeds from its senior note offering and term loan for general corporate purposes.

At the end of its fund raising activities it plans to have a cash and marketable securities balance north of $1.2 billion.

Arch said it also planned to try to amend its secured revolving credit facility to get more flexibility under the convenants governing that facility.

Arch president and chief executive John Eaves said the company was executing a “comprehensive financing plan aimed at boosting our cash on hand, enhancing our overall liquidity and maintaining our financial flexibility”

“This plan provides Arch with excess liquidity in case the current market weakness lasts longer than expected and adds long-term pre-payable debt to help the company achieve its de-levering goal as markets recover,” he said.

Ratings agency Fitch disagreed about the de-leveraging, downgrading its Arch Coal credit rating a notch from B+ to B.

It said the $250 million term loan would increase the company’s leverage position.

It is expecting the tough market conditions Arch – and other coal producers – faced in 2012 could extend through to 2014.

However, Fitch reckons Arch will have enough liquidity to weather the pain.

Eaves said he was confident Arch’s efforts to improve operational efficiency, cut capital spending and bolster its financial resources would keep the company going strong.