Excelerate Energy entered into an amended and restated senior secured credit agreement.
Key updates to the credit agreement include, among other things:
- A new $250 million term loan facility maturing on March 17, 2027
- Extending the maturity date of the existing $350 million revolving credit facility to March 17, 2027
- Increasing the maximum consolidated total leverage by 0.50x to 3.50x, provided that, if the aggregate value of all unsecured debt is equal to or greater than $250 million, maximum consolidated total leverage increases to 4.25x
- Requiring collateral vessel maintenance coverage to be not less than the greater of $750 million and 130% of the sum of the total credit exposure under the credit agreement
Proceeds from the term loan facility are intended to be used for the acquisition of the FSRU Sequoia, which is currently under a bare boat charter with a third party until mid-2025, and transaction fees and expenses related thereto. Excelerate intends to acquire the vessel by exercising a purchase option that it has with the vessel’s owner and for the purchase to be completed in April 2023. The commitments under the term loan facility expire on May 1, 2023 if the acquisition of the FSRU Sequoia does not occur by such date. Proceeds from the revolving credit facility are expected to be used primarily for letters of credit, working capital, and other general corporate purposes.
“Refinancing our existing credit facility is a significant next step in our plans to improve our capital structure, and we would like to thank our lenders for their continued support and confidence in Excelerate,” Dana Armstrong, CFO of Excelerate Energy, said. “This amended credit facility enhances our financial flexibility and supports our future growth and development initiatives. We are excited to acquire the FSRU Sequoia, one of the most capable vessels in the industry, at an attractive price well below current market values.”
Borrowings will bear interest at a per annum rate equal to the Secured Overnight Financing Rate (SOFR) reference rate (or alternative base rate), for such period plus an applicable margin, which will be based on Excelerate’s consolidated leverage ratio as defined under the Facility.
The facility contains customary representations, warranties, covenants (affirmative and negative), and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the facility. Wells Fargo Bank is acting as administrative agent. Wells Fargo Securities, along with Sumitomo Mitsui Banking Corporation, DNB Markets and Credit Agricole Corporate and Investment Bank served as joint lead arrangers, with Barclays Bank, Nordea Bank ABP, Morgan Stanley Bank, BNP Paribas and First Financial Bank as additional lenders.
Gibson, Dunn & Crutcher and Frederic Dorwart, Lawyers served as counsel to Excelerate.