According to a SEDAR filing, HSBC Bank Canada served as administrative agent, lead arranger and sole bookrunner on amendments to Western Energy’s syndicated revolving first lien credit facility and committed operating facility. Among other things, the amendment reduced the commitment under the revolver from $70 million to $50 million.
ATB Financial and TD Bank joined HSBC as lenders on the facilities.
Other changes to the credit facilities’ covenants included:
- Extending the facilities to December 17, 2021
- Removing the minimum debt service coverage ratio financial covenant
- Adding a current ratio financial covenant stipulating Western’s current ratio, excluding the current portion of long term debt and accrued interest thereon, must not be less than 1.15x
The amendment also included various changes to the calculation of the borrowing base.
Western remains in compliance with all existing debt covenants and is in compliance with all new debt covenants. The company believes the reduced commitment under the facilities more appropriately matches the requirements of the business in the current economic environment and expects the revisions to provide it with incremental financial flexibility as it conducts its operations.
Western Energy Services is an oilfield service company which provides contract drilling services in Canada through its Horizon Drilling division and in the United States through its wholly-owned subsidiary Stoneham Drilling.