C&J Energy Services revises structure to a single $650 million term B

By Sara Rosenberg

New York, Nov. 24 – C&J Energy Services Inc. is now looking to get a $650 million five-year senior secured term loan B instead of a $300 million five-year term loan B-1 and a $375 million seven-year term loan B-2, according to a market source.

The term loan B is talked at Libor plus 400 basis points with a 1% Libor floor and an original issue discount of 98, the source said.

Also, the term loan B has 101 soft call protection for six months, amortization of 1% per annum, 50 bps MFN protection or life, and maximum total leverage, maximum secured leverage and minimum interest coverage covenants.

By comparison, price talk on the term loan B-1 was Libor plus 350 bps to 375 bps with a 0.75% Libor floor and an original issue discount of 99, and talk on the term loan B-2 was Libor plus 375 bps to 400 bps with a 1% Libor floor and a discount of 99, with both having 101 soft call protection for six months.

The term loan B-1 had maximum total leverage, maximum secured leverage and minimum interest coverage covenants, while the term loan B-2 was covenant-light.

Commitments were due at 5 p.m. ET on Monday, the source continued.

The company’s now $1.25 billion credit facility, down from $1,275,000,000, also provides for a $600 million revolver.

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.

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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