JPMorgan Agents Key Energy Services Facility Amendment
Key Energy Services announced that it has amended its credit agreement dated March 31, 2011. According to the company 8-K filing, JPMorgan Chase Bank served as administrative agent; Bank of America was syndication agent; and Capital One, Wells Fargo Bank, Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA served as co-documentation agents.
The company reduced the total commitments by the lenders under the credit facility from $550 million to $400 million, which will automatically be further reduced from $400 million to $350 million on July 1, 2015 through the maturity of the credit facility in March of 2016.
This revision also amends the requirement that the company maintain a consolidated interest coverage ratio of not less than 3.00 to 1.00 by changing the minimum required ratio to not less than 2.75 to 1.00 for the quarters ending December 31, 2014 through September 30, 2015 with the ratio increasing to not less than 3.00 to 1.00 for the quarter ending December 31, 2015 and thereafter.
Dick Alario, Key Energy’s chairman, president and CEO stated, “We are pleased to have completed this step in amending our existing credit facility to improve our liquidity position. We will be working with our lenders to replace our Credit Facility that matures in March 2016. Taking in to account the current amendments made to the credit facility, Key’s liquidity position as of the end of the third quarter of 2014 would have been $328.3 million, which includes cash of $57.4 million as of the end of the third quarter of 2014 and undrawn availability under the credit facility.”
Key Energy Services is an onshore, rig-based well servicing contractor.