Basic Energy gets $165 million revolver via Merrill, Capital One

By Susanna Moon

Chicago, Feb. 18 - Basic Energy Services, Inc. entered into a new $165 million revolving credit facility due Jan. 15, 2016 with Merrill Lynch, Pierce, Fenner & Smith Inc. and Capital One, NA as joint lead arrangers and joint book managers, according to an 8-K filing with the Securities and Exchange Commission.

At Basic's option, advances under the agreement may comprise alternate base rate loans or eurodollar loans with a variable base interest rate plus a margin based on Basic's leverage ratio. The margin for alternate base rate loans will be 150 basis points to 225 bps, and the margin for the eurodollar loans will be 250 bps to 325 bps.

There is an unused fee of 50 bps.

The credit agreement includes an accordion feature that allows the total credit facility to be increased by up to $100 million under some circumstances, subject to additional lender commitments.

Bank of America, NA is the administrative agent.

Basic may prepay the credit agreement at any time without premium or penalty.

Covenants require Basic to maintain a minimum consolidated interest coverage ratio of no less than 2.50 to 1.00, a maximum consolidated leverage ratio not to exceed 4.25 to 1.00 for the quarter ending March 31, 2011 and 4.00 to 1.00 after March 31, 2011, and a maximum consolidated senior secured leverage ratio of 2.00 to 1.00.

Basic Energy Services is based in Midland, Texas, and provides well site services to oil and gas companies.

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