Hornbeck Offshore Services has refinanced its existing $200 million senior secured revolving credit facility with a new first-lien delayed-draw credit facility providing for up to $300 million of term loans. The six-year term of the new credit facility extends the maturity of the old credit facility from February 2020 to June 2023.
According to a related 8-K filing, Wilmington Trust is administrative agent and collateral agent for the lenders.
The new credit facility enhances the company’s financial flexibility by increasing liquidity from the currently applicable borrowing base of $75 million under the old credit facility, extending the maturity date that existed under the old credit facility by over three years and eliminating all of the existing financial ratio maintenance covenants and the anti-cash hoarding provision of the old credit facility.
The new facility may be used for working capital and general corporate purposes, including the acquisition of distressed assets and/or the refinancing of existing debt, subject to compliance with certain minimum liquidity (cash and credit availability) requirements.
Borrowings under the new credit facility accrue interest at either the LIBOR rate or base rate. The cash-pay LIBOR spread for floating-rate funded borrowings under the new credit facility is LIBOR+600 in year one, LIBOR+650 in year two, LIBOR+700 in year three, LIBOR+725 in year four and LIBOR+750 thereafter; subject to a 1.00% LIBOR floor. The base rate spreads are 100 bps less than the LIBOR rate spreads for each respective year. The new credit facility is pre-payable at 102% of principal in year one, 101% of principal in year two, and at par thereafter.
The company’s exclusive financial advisor in connection with the transaction was PricewaterhouseCoopers Corporate Finance, and the company’s legal advisors were Latham & Watkins and Winstead.