Weatherford International refinanced its senior secured asset-based lending agreement (ABL credit agreement) through the issuance of $500 million of senior secured first lien notes (senior secured notes). Weatherford also amended and increased the size of its senior secured letter of credit agreement (LC credit agreement) to $215 million.
According to an 8K filed with the SEC, Wilmington Trust served as trustee and collateral agent on the senior secured notes, Deutsche Bank served as administrative agent on the LC credit agreement and Wells Fargo was the administrative agent on the now terminated ABL credit agreement.
Weatherford will use the proceeds from the issuance of the senior secured notes to enhance the company’s liquidity and support the issuance of letters of credit. These actions will provide Weatherford with additional liquidity and flexibility to manage through the current operating environment, with the company having more than $1.2 billion of cash on hand at closing, including the net proceeds from the transactions, over $50 million of capacity under its upsized LC facility and no debt maturities prior to Q2/24.
“We have strengthened the company’s capital structure, enabling Weatherford to continue to deliver against our strategic objectives during this challenging environment,” Charles M. Sledge, chairman of the board of directors for Weatherford, said. “These transactions successfully conclude the review of alternatives announced in May. We appreciate the continued support provided by the company’s stakeholders and the confidence they have placed in our long-term success.”
Key Details of the Transactions:
- Issued $500 million of 8.75% senior secured first lien notes maturing on Sept. 1, 2024
- Terminated the ABL credit agreement by repaying all borrowings and cash collateralizing or moving letters of credit under the LC credit facility
- Amended the LC Credit Agreement to, among other things, increase the aggregate commitments under the facility to $215 million and reduce the minimum liquidity covenant
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Lazard served as Weatherford’s financial advisor on the transactions and Paul, Weiss, Rifkind, Wharton & Garrison and Latham & Watkins served as the company’s legal counsel.
Weatherford is a wellbore and production solutions company.
