Civeo completed the third amendment to its credit facility to, among other things, relax certain covenants to provide greater flexibility, including enhancing Civeo’s ability to make acquisitions, and to reduce the borrowing availability to a level more consistent with currently expected needs, which will reduce the undrawn commitment fees.
According to a related 8-K filing, Royal Bank of Canada served as administrative agent for the lender group.
Under the amended credit facility, Civeo’s leverage ratio has a maximum of 5.25x in the first and second quarter of 2017 before stepping up to a maximum of 5.85x in the third quarter of 2017 through the third quarter of 2018. The leverage ratio then decreases to 5.50x in the fourth quarter of 2018 and steps down to 5.25x in the first quarter of 2019 and thereafter.
The amendment establishes interest rates for leverage ratios greater than or equal to 5.50x that are 50 basis points higher than the highest rate prior to the amendment.
In conjunction with this amendment, Civeo reduced revolving loan commitments by a total of $75 million to $275 million as follows:
- $10 million of the U.S. revolving credit facility to $40 million
- $15 million of the Australian revolving credit facility to $85 million
- $10 million of the Canadian revolving credit facility tranche A to $90 million
- $40 million of the Canadian revolving credit facility tranche B to $60 million
As a result, Civeo reduced its total borrowing capacity going forward, including the aforementioned revolving loan commitments and the outstanding term loans, from $700 million to $625 million.
Houston-based Civeo is a provider of workforce accommodations with market positions in the Canadian oil sands and the Australian natural resource regions.