(NRP) Natural Resource Partners L.P. Unit Issuing Senior Notes

Natural Resource Partners L.P. (NRP) announced that its subsidiary NRP (Operating) LLC issued the previously announced $50 million of senior notes yielding interest of 5.03% per year and maturing on December 1, 2026. The partnership intends to utilize the proceeds to fund future acquisitions including the remaining balance of the Hillsboro acquisition.

In April 2011, the partnership had issued $200 million in two tranches, one of $75 million having an interest rate of 4.73% maturing on December 1, 2023 and the other $125 million having an interest rate of 5.03% maturing on December 1, 2026.

The partnership will issue another series of senior notes on October 2011. That series will have $50 million of senior notes having an interest rate of 5.18% maturing December 1, 2026.

The partnership will receive $300 million when the issue of all four series of notes is completed. The four series of senior notes carry a weighted average interest rate of 4.98%. The partnership issued these low interest bearing notes with the intention of lowering its dues under its revolving credit facilities and to fund future acquisitions.

Natural Resource Partners’ long-term debts as of March 31, 2011, were $730.9 million versus $657.4 million as of March 31, 2010. The interest payments made during the quarter amounted to $17.5 million. With the issue of $250 million senior notes during the quarter, the interest expenses are likely to shoot up going forward.

Natural Resource Partners’ earnings per unit of 42 cents during the first quarter exceeded the year ago quarter’s results and the Zacks Consensus Estimate. The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are, respectively, 43 cents per unit, $1.71 per unit and $2.09 per unit.

Natural Resource Partners currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with Peabody Energy Corporation (BTU) and CONSOL Energy Inc. (CNX).

Based in Houston, Texas, Natural Resource Partners principally engages in owning and managing of mineral reserve properties. The partnership mainly owns coal, aggregate, and oil and gas reserves across the United States.

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