Daily News: October 2, 2017

UMB Agents $100MM A/R Facility for Basic Energy Services


Basic Energy Services (BES) entered into a $100 million accounts receivable securitization facility with UMB Stamford Branch as administrative agent.

According to a related 8-K filing, under the transfer agreement, BES will sell or contribute, on an ongoing basis, its accounts receivable and related security and interests in the proceeds thereof to Basic Energy Receivables (the SPE). The SPE will finance a portion of its purchase of the accounts receivable through borrowings, on a revolving basis, of up to $100 million (with the ability to request an increase in the size of the A/R facility by $50 million) under the credit agreement. Such borrowings will be secured by the accounts receivable.

The SPE will finance its purchase of the remaining portion of the accounts receivable by issuing subordinated promissory notes to BES and/or by contributing the remaining portion of the account receivable in exchange for equity in the SPE in the amount of the purchase price of the receivable not paid in cash. BES will be responsible for the servicing, administration and collection of the accounts receivable, with all collections going into lockbox accounts. The company has provided a customary guaranty of performance to the administrative agent with respect to certain obligations of BES and any successor servicer under the A/R facility.

In connection with entering into the A/R facility, the company terminated its previously existing $75 million credit facility that was evidenced by that certain second amended and restated ABL credit agreement dated December 23, 2016, with Bank of America as administrative agent for the lenders.

The company also terminated a certain intercreditor agreement dated as December 23, 2016, among Bank of America, as ABL representative, U.S. Bank, as term loan representative and each of the grantors party.