Key Energy Services plans to enter into new term loan and ABL facilities in connection with its plan of reorganization, filed with the U.S. Bankruptcy Court in the District of Delaware on October 24, 2016.

According to the disclosure statement filed alongside the plan of reorganization, Key plans to enter into a new $250 million term loan facility with terms substantially similar to its June 1, 2015 facility with an applicable interest rate of either LIBOR+10.25% per annum in the case of LIBOR loans or base rate + 9.25% per annum in the case of base rate loans. Cortland Capital Market Services will serve as agent and Bank of America as sole lead arranger and bookrunner.

The company also intends to enter into the new ABL credit agreement with terms similar to a June 1, 2015, $38.5 million ABL agreement, in which Bank of America served as as administrative agent and co-collateral agent, Wells Fargo Bank as co-collateral agent, joint lead arranger and bookrunner, and sole syndication agent, and Merrill Lynch, Pierce, Fenner & Smith as joint lead arranger and bookrunner.

As of September 21, 2016, the company had outstanding funded indebtedness and letters of credit in the aggregate principal amount of approximately $1 billion. As a result of the proposed plan, the company will reduce its total operating company funded debt from approximately $1 billion to approximately $250 million.