UPDATE 1-James River to raise $125 mln in senior notes offering

* To offer notes to qualified institutional buyers

* To use $57.3 mln to end letter of credit facility

* Buyers to get over-allotment option of $18.8 mln

* Shares down about 6.5 pct after-market

Nov 12 (Reuters) - James River Coal Co (JRCC.O) said it plans to offer $125 million convertible senior notes and intends to use about $57.3 million from the proceeds to terminate its letter of credit facility.

The coal miner said the proceeds from the notes offering will also be used for working capital and general corporate purposes, including potential acquisitions or repayment debt.

The company will offer the notes, due 2015, to qualified institutional buyers, James River said in a statement.

The buyers will have an over-allotment option of $18.8 million, the company said.

Shares of the company dropped about 6 percent to $20.62 in trading after the bell. They closed at $21.92 Wednesday on Nasdaq. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Unnikrishnan Nair)