Weatherford units get $370 million two-tranche credit facility

By Mary-Katherine Stinson

Lexington, Ky., Oct. 18 – Weatherford International plc as parent and Weatherford International Ltd. and Weatherford International, LLC as borrowers entered an amended and restated credit agreement effective Oct. 17, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement provides for a $370 million credit facility comprised of two tranches.

Tranche A is $280 million for the issuance of bid and performance letters of credit and tranche B is $90 million for revolving loans and the issuance of bid, performance and financial letters of credit.

Currently tranche B provides up to $45 million for revolving loans.

The amended and restated agreement allows the borrowers to move up to $100 million of existing commitments to tranche B from tranche A and request incremental increases of tranche A up to $225 million and tranche B up to $12.5 million upon the satisfaction of certain conditions provided that the total facility commitments do not exceed $600 million.

As of Oct. 17, there were approximately $163.25 million of outstanding letters of credit under tranche A and none under tranche B.

The facility matures Oct. 17, 2026. The maturity date will be moved up to Aug. 30, 2024 if more than $50 million of Weatherford International Ltd.’s 11% senior notes due 2024 are outstanding on such date.

Borrowings will bear interest at SOFR with an adjustment of 10 basis points plus an applicable margin of 225 bps to 375 bps annually for tranche A depending on the company’s credit rating and 350 bps annually for tranche B.

There is a fronting fee of 12.5 bps on the outstanding amount of each letter of credit and an unused commitment fee of 50 bps on the average daily unused commitments.

The obligations are guaranteed by the company and its subsidiaries and secured by the personal property of the company and subsidiaries including a first lien on the priority collateral for the amended and restated credit agreement and a second lien on the priority collateral for Weatherford International Ltd.’s 6˝% senior secured first-lien notes due 2028.

Wells Fargo Bank, NA is the administrative agent.

Wells Fargo Securities, LLC, Barclays and Deutsche Bank Securities Inc. are the joint lead arrangers and joint bookrunners.

The agreement amends and restates the company’s existing secured credit agreement dated as of Dec. 13, 2019 with Deutsche Bank Trust Co. as the original administrative agent.

Weatherford is an oilfield services company with operational headquarters in Houston.

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