LONG-TERM DEBT

12 Months Ended

Dec. 31, 2022

LONG-TERM DEBT

LONG-TERM DEBT

8.LONG-TERM DEBT

Long-term debt consists of the following:

					Unamortized Discount and
	Principal				Debt Issuance Costs
	December 31,				December 31,
	2022		2021		2022		2021
	(in thousands)
Replaced credit facility	$	—	$	—	$	(2,702)	$	(5,019)
Senior notes		400,000		400,000		(2,134)		(3,048)
Securitization facility		—		—		—		—
May 2019 equipment financing		—		1,503		—		—
November 2019 equipment financing		21,072		31,972		—		—
June 2020 equipment financing		5,937		9,605		—		—
		427,009		443,080		(4,836)		(8,067)
Less current maturities		(24,970)		(16,071)		—		—
Total long-term debt	$	402,039	$	427,009	$	(4,836)	$	(8,067)

Credit Facility.  On January 13, 2023, Alliance Coal entered into a Credit Agreement (the "Credit Agreement") with various financial institutions.  The Credit Agreement provides for a $425 million revolving credit facility, which includes a sublimit of $15.0 million for swingline borrowings and permits the issuance of letters of credit of up to the full amount of $425 million (the "Revolving Credit Facility"), and for a term loan in an aggregate principal amount of $75 million (the "Term Loan").  The Credit Agreement matures on March 9, 2027, at which time the aggregate outstanding principal amount of all Revolving Credit Facility advances and all Term Loan advances are required to be repaid in full.  The Credit Agreement will instead mature on January 30, 2025, if on that date our Senior Notes, as discussed below, are still outstanding and Alliance Coal does not have liquidity of at least $200 million.  Interest is payable quarterly, with principal of the Term Loan due in quarterly installments equal to 6.25% of the original principal amount of the Term Loan beginning with the quarter ending June 30, 2023 and the balance payable at maturity.  The Credit Facility replaces the $459.5 million revolving credit facility ("Replaced Credit Facility"), which included a sublimit of $125 million for the issuance of letters of credit and a sublimit of $15.0 million for swingline borrowings, extended to the Intermediate Partnership under its Fifth Amended and Restated Credit Agreement, dated as of March 9, 2020 that would have expired on March 9, 2024.

The Credit Agreement is guaranteed by ARLP and certain of its subsidiaries, including the Intermediate Partnership and most of the direct and indirect subsidiaries of Alliance Coal (the "Subsidiary Guarantors").  The Credit Agreement also is secured by substantially all of the assets of the Subsidiary Guarantors and Alliance Coal.  Borrowings under the Credit Agreement bear interest, at our option, at either (i) an adjusted term rate plus the applicable margin or (ii) the base rate plus the applicable margin.  The base rate is the highest of (i) the Overnight Bank Funding Rate plus 0.50%, (ii) the Administrative Agent's prime rate, and (iii) the Daily Simple Secured Overnight Financing Rate plus 100 basis points.  The applicable margin for borrowings under the Credit Agreement are determined by reference to the Consolidated Debt to Consolidated Cash Flow Ratio.  Borrowings under the Replaced Credit Facility bore interest, at our option, at either (i) the base rate at the greater of three benchmarks or (ii) a Eurodollar Rate, plus margins.  The Eurodollar Rate, with applicable margin, under the Replaced Credit Facility was 6.74% as of December 31, 2022.  At December 31, 2022, we had $41.1 million of letters of credit outstanding with $418.4 million available for borrowing under the Replaced Credit Facility. We incurred an annual commitment fee of 0.35% on the undrawn portion of the Replaced Credit Facility.

The Credit Agreement contains various restrictions affecting Alliance Coal and its subsidiaries, including, among other things, restrictions on incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates.  In each case, these restrictions are subject to various exceptions. In addition, the restrictions apply to the payment of cash distributions if such payment would result in a certain fixed charge coverage ratio (as determined in the Credit Agreement) or in Alliance Coal having liquidity of less than $200 million.  The Credit Agreement requires us to maintain (a) debt of Alliance Coal to cash flow ratio of not more than 1.5 to 1.0, (b) a consolidated debt of Alliance Coal and the Intermediate Partnership to cash flow ratio of not more than 2.5 to 1.0 and (c) an interest coverage ratio of not less than 3.0 to 1.0, in each case, during the four most recently ended fiscal quarters.  The Replaced Credit Facility was subject to similar restrictions on the Intermediate Partnership. The Replaced Credit Facility required the Intermediate Partnership to maintain (a) a debt to cash flow ratio of not more than 2.5 to 1.0, (b) a cash flow to interest expense ratio of not less than 3.0 to 1.0 and (c) a first lien debt to cash flow ratio of not more than 1.5 to 1.0, in each case,

during the four most recently ended fiscal quarters. The debt to cash flow ratio, cash flow to interest expense ratio and first lien debt to cash flow ratio were 0.52 to 1.0, 21.76 to 1.0 and 0.03 to 1.0, respectively, for the trailing twelve months ended December 31, 2022.  We remained in compliance with the covenants of the Replaced Credit Facility as of December 31, 2022 and anticipate remaining in compliance with the covenants of the new Credit Agreement.  We utilize the Credit Agreement, as appropriate, for working capital requirements, capital expenditures and investments, scheduled debt payments and distribution payments.  

Net restricted assets, as defined by the Securities and Exchange Commission, refers to the amount of our consolidated subsidiaries' net assets for which the ability to transfer funds to ARLP in the form of cash dividends, loans, advances, or transfers is restricted.  As a result of the restrictions contained in the Replaced Credit Facility and its associated compliance ratios, the amount of our net restricted assets at December 31, 2022 was $537.3 million.

Senior Notes. On April 24, 2017, the Intermediate Partnership and Alliance Resource Finance Corporation ("Alliance Finance") (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership, issued an aggregate principal amount of $400.0 million of senior unsecured notes due 2025 ("Senior Notes") in a private placement to qualified institutional buyers.  The Senior Notes have a term of eight years, maturing on May 1, 2025 (the "Term") and accrue interest at an annual rate of 7.5%.  Interest is payable semi-annually in arrears on each May 1 and November 1.  The indenture governing the Senior Notes contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of distributions or similar restricted payments, undertaking transactions with affiliates and limitations on asset sales.  The issuers of the Senior Notes may redeem all or a part of the notes at any time at redemption prices set forth in the indenture governing the Senior Notes.  

Accounts Receivable Securitization.  Certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership are party to a $60.0 million accounts receivable securitization facility ("Securitization Facility").  Under the Securitization Facility, certain subsidiaries sell certain trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, LLC ("AROP Funding"), a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $60.0 million secured by the trade receivables.  After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding.  The Securitization Facility bears interest based on a short-term bank yield index.  On December 31, 2022, we had $11.7 million of letters of credit outstanding with $48.3 million available for borrowing under the Securitization Facility.  The agreement governing the Securitization Facility contains customary terms and conditions, including limitations with regards to certain customer credit ratings.  In January 2023, we extended the term of the Securitization Facility to January 2024.  The Securitization Facility was previously scheduled to mature in January 2023.  At December 31, 2022, we did not have any outstanding borrowings under the Securitization Facility.

May 2019 Equipment Financing.  On May 17, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $10.0 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "May 2019 Equipment Financing").  The May 2019 Equipment Financing contained customary terms and events of default and provided for thirty-six monthly payments with an implicit interest rate of 6.25%.  The May 2019 Equipment Financing matured on May 1, 2022 and the equipment reverted back to the Intermediate Partnership.

November 2019 Equipment Financing.  On November 6, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $53.1 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "November 2019 Equipment Financing").  The November 2019 Equipment Financing contains customary terms and events of default and an implicit interest rate of 4.75%, providing for a four year term with forty-seven monthly payments of $1.0 million and a balloon payment of $11.6 million upon maturity on November 6, 2023.  Upon maturity, the equipment will revert back to the Intermediate Partnership.    

June 2020 Equipment Financing.  On June 5, 2020, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $14.7 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "June 2020 Equipment Financing"). The June 2020 Equipment Financing contains customary terms and events of default and provides for forty-eight monthly payments with an implicit interest rate of 6.1%, maturing on June 5, 2024. Upon maturity, the equipment will revert back to the Intermediate Partnership.    

Other.  We also have an agreement with a bank to provide additional letters of credit in an amount of $5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers' compensation benefits.  At December 31, 2022, we had $5.0 million in letters of credit outstanding under this agreement.

Aggregate maturities of long-term debt are payable as follows:

Year Ended
December 31,	(in thousands)
2023	$	24,970
2024		2,039
2025		400,000
	$	427,009