Helix Energy Solutions Group has amended its credit agreement to provide the company with increased financial flexibility through the third quarter of 2017.

According to a related 8-K filing, Bank of America, as administrative agent, swing line lender and letters of credit issuer, led the third amendment to an existing agreement dated as of June 19, 2013.

The amendment includes the following items:

  • Reduction of the credit facility revolver commitment from $600 million to $400 million, which will save the company $1 million annually in commitment fees.
  • Increasing the trailing four quarter maximum leverage ratio to 5.5x for the quarter ending March 31, 2016 then decreasing gradually over successive quarters to 3.5x by December 31, 2017.
  • Decreasing the trailing four quarter minimum interest coverage ratio to 2.5x for the quarter ending March 31, 2016 then increasing to 3.0x by June 30, 2017.
  • Adding a cash requirement covenant of $50 million if our leverage ratio exceeds 3.5x, $100 million if it exceeds 4.0x and $150 million if it exceeds 4.5x.

Anthony Tripodo, executive vice president and chief financial officer of Helix, stated, “We are pleased to announce the amendment of our credit facility. Although the company ended 2015 with nearly $750 million of total liquidity, we believe it is prudent to obtain longer term flexibility with our credit facility given the persistent weak industry environment as well as our remaining capital commitments. We are very appreciative of the support from our lending group.”

Houston-based Helix Energy Solutions Group is an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations.