K-Sea obtains amended $120 million revolver

New York, Oct. 24 - K-Sea Transportation Partnership LP said it amended its credit agreement to provide it with a $120 million revolver as part of its acquisition of Sea Coast Transportation LLC from Marine Resources Group, Inc.

On Oct. 18, the date the amendment closed, the company borrowed $77.2 million to finance the acquisition of Sea Coast, the acquisition by Sea Coast of four additional vessels from Marine Resources Group and fees and expenses.

That draw brought total borrowings to $93.2 million, plus $6.5 million of standby letters of credit.

The new revolver is due Oct. 18, 2010. There is an accordion feature allowing an increase in availability to $170 million.

Interest is set by a grid based on total funded debt to EBITDA, and ranges from Libor plus 100 to Libor plus 200 basis points. Similarly the commitment fee varies from 15 to 30 basis points.

Under the facility covenants, K-Sea is required to maintain fixed charges to EBITDA of at least 2.25 to 1.00, total funded debt to tangible capitalization of no greater than 0.60 to 1.00 and total funded debt to EBITDA of 3.75 to 1.00 for the period March 24, 2004 to Oct. 18, 2005, 4.00 to 1.00 for the period Oct. 18, 2005 to Dec. 31, 2006 and 3.75 to 1.00 for the period Jan. 1, 2007 onwards.

LaSalle Bank NA is syndication agent and KeyBank NA is administrative agent and collateral trustee.

K-Sea is a New York City-based marine transportation company. It had planned to repay bank borrowings with an offering of $150 million of seven-year senior notes but abandoned that transaction Monday due to market conditions.

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