November 26, 2024 - Peabody Energy has obtained a $2.075-billion bridge loan from a mix of banks and private credit to back its acquisition of Anglo American’s steelmaking coal business.

Peabody plans to refinance the loan before the acquisition closes in the first half of next year, the company said in a public filing. Jefferies, Deutsche Bank, KKR Capital Markets and KKR Corporate Lending are providing the loan, according to the statement.

Private credit has emerged as a financing alternative to traditional lenders that have become reluctant to fund projects that may trigger environmental, social and governance risks. Australian coal miner Whitehaven Coal earlier this year secured a $1.1-billion loan from 17 private credit providers and one bank for the purchase of two mines from BHP Group.

Peabody agreed to acquire Anglo American’s coal operations in Australia’s Queensland state to expand into metallurgical coal production, used in the manufacture of steel. The company has separately inked a deal to sell a controlling interest in one of the mines to Indonesia’s PT Delta Dunia Makmur for $455-million.

Anglo American’s sale of its coal business in Australia is part of a restructuring strategy to fend off a $49-billion takeover offer from BHP Group earlier this year.