C&J Energy Services launches $675 million in term loans to investors

By Sara Rosenberg

New York, Nov. 12 – C&J Energy Services Inc. launched with its bank meeting on Wednesday $675 million in senior secured term loans, according to a market source.

The debt consists of a $300 million five-year term loan B-1 and a $375 million seven-year term loan B-2, the source said.

Price talk on the term loan B-1 is Libor plus 350 basis points to 375 bps with a 0.75% Libor floor and an original issue discount of 99, and talk on the term loan B-2 is Libor plus 375 bps to 400 bps with a 1% Libor floor and a discount of 99, the source continued.

Both term loans have 101 soft call protection for six months.

Mandatory prepayments are 100% of asset sales/insurance proceeds and 100% of debt proceeds, other than permitted debt.

Included in the term loan B-1 are maximum total leverage, maximum secured leverage and minimum interest coverage covenants, while the term loan B-2 is covenant-light.

Amortization on both term loans is 1% per annum.

Commitments are due on Nov. 20, the source added.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and J.P. Morgan Securities LLC are the lead arrangers on the deal. Senior co-managers are Capital One and Comerica, and co-managers are Amegy Bank, DNB, Scotia Bank and Regions Financial Corp. Bank of America is the administrative agent.

Along with the term loans, the company is seeking a $600 million revolver.

Proceeds will be used to fund the company’s combination with Nabors Industries Ltd.’s completion and production services business.

Upon closing of the transaction, Nabors will receive total consideration comprised of a fixed 62.5 million common shares in the merged company and about $938 million in cash.

Closing is expected in the fourth quarter, subject to stockholder approval and customary conditions.

C&J is a Houston-based provider of hydraulic fracturing, coiled tubing, cased-hole wireline, pumpdown and other oilfield services.

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