Chicago Bridge arranges $800 million bridge loan to fund Shaw merger

By Angela McDaniels

Tacoma, Wash., Aug. 1 - Chicago Bridge & Iron Co. NV received commitments for $2.2 billion of new senior credit facilities on Monday, according to an 8-K filing with the Securities and Exchange Commission.

The facilities consists of an $800 million 364-day bridge loan facility, a $400 million five-year revolving credit facility and a $1 billion four-year term loan facility.

Bank of America, NA is the administrative agent. Bank of America Merrill Lynch and Credit Agricole Corporate and Investment Bank are the lead arrangers.

The borrowings may be used to finance the company's acquisition of Shaw Group Inc. and, in the case of the revolver, for working capital and other general corporate purposes after the merger closes.

Chicago Bridge & Iron agreed to acquire Shaw in a cash-and-stock deal valued at about $3 billion. The transaction is expected to close in the first quarter of 2013.

The availability of funds under the new facilities is subject to the completion of the merger. In addition, Chicago Bridge & Iron's pro forma leverage ratio must be 3.25 times or less on the merger's closing date, and Shaw must have at least $800 million of unrestricted cash and cash equivalents at closing.

From the commitment date until the facilities are funded, the company will pay a ticking fee of 30 basis points on the bridge facility and the revolver and 25 bps on the term loan facility.

Terms

The initial interest rate for the bridge facility will be Libor plus 225 bps. The margin over Libor will increase to 275 bps 91 days after closing, to 325 bps 181 days after closing and to 375 bps 271 days after closing.

The company will pay a duration fee for the bridge loan of 50 bps 90 days after the closing date, 100 bps 180 days after the closing date and 150 bps 270 days after the closing date.

For the term loan facility and the revolver, the initial interest rate will be Libor plus 200 bps. The margin ranges from 137.5 bps to 250 bps and depends on the company's leverage ratio.

The initial commitment fee for the revolver will be 30 bps. Depending on leverage, it ranges from 17.5 bps to 40 bps.

The revolver will have a $500 million accordion feature.

In addition, the lending parties agreed to arrange an amendment to the company's existing $1.1 billion revolver or, if the amendment is not obtained, to provide a new $1.1 billion revolver.

Chicago Bridge & Iron engineers and constructs energy infrastructure projects. It is based in the Hague, and its worldwide administrative office is located in the Woodlands, Texas.

Shaw Group provides engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. The company is based in Baton Rouge, La.

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