Clean Harbors gets $400 million amended, restated revolver

By Angela McDaniels

Tacoma, Wash., Jan. 18 - Clean Harbors, Inc. and Canadian subsidiary Clean Harbors Industrial Services Canada, Inc. entered into a $400 million amended and restated revolving credit facility due Jan. 17, 2018 on Thursday, according to a Friday 8-K filing with the Securities and Exchange Commission.

Clean Harbors can borrow up to $300 million and has a $250 million sublimit for letters of credit. The Canadian subsidiary can borrow up to $100 million and has a $75 million sublimit for letters of credit.

The initial interest rate is Libor plus 150 basis points. The margin ranges from 150 bps to 200 bps based primarily on the company's consolidated fixed charge coverage ratio. The commitment fee is 25 bps to 37.5 bps. The letter-of-credit fee is equal to the margin over Libor.

Availability under the U.S. line is subject to a borrowing base comprised of 85% of the eligible accounts receivable of the company and its U.S. subsidiaries plus 100% of cash deposited in a controlled account with the agent, and availability under the Canadian line is subject to a borrowing base comprised of 85% of the eligible accounts receivable of the company's Canadian subsidiaries plus 100% of cash deposited in a controlled account with the agent's Canadian affiliate.

Bank of America, NA is the administrative agent. Bank of America Merrill Lynch is the arranger and bookmanager. CIBC Inc. is the syndication agent. RBS Business Capital is documentation agent. Bank of America and JP Morgan Chase Bank, NA are the issuing banks for letters of credit.

Under the revolver, the agent would have the right to exercise dominion over the company's and its subsidiaries' cash (to the extent such cash represents the proceeds of accounts receivable) if the company's liquidity is less than the greater of (i) $50 million and (ii) 12.5% of the commitments of the facility lenders.

If the company's liquidity should be less than the greater of (i) $40 million and (ii) 10% of the commitments, the company will be required to maintain a consolidated fixed charge coverage ratio of at least 1 to 1.

In addition, the facility contains covenants that will restrict the company's future ability to make certain types of acquisitions, debt prepayments, investments and distributions if its liquidity is less than between 35% and 15% (depending upon the type of restricted event) of the lenders' commitments or, if the company's consolidated fixed charge coverage ratio is at least 1 to 1, less than 17.5% or 15% of the commitments.

Clean Harbors is a Norwell, Mass.-based environmental, energy and industrial services provider.

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