Clean Harbors amends agreement, adds up to $400 million revolver

By Tali Rackner

Norfolk, Va., Nov. 2 – Clean Harbors, Inc. and a Canadian subsidiary entered into a fifth amended and restated credit agreement on Wednesday, adding a new revolving credit facility with agent Bank of America, NA, according to an 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 facility expires on Nov. 1, 2021.

Borrowings bear interest at Libor plus 125 basis points to 150 bps, based on Clean Harbors’ average liquidity for the most recent 30-day period. Initial interest is Libor plus 150 bps.

The commitment fee ranges from 25 bps to 30 bps. The initial fee is 30 bps.

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.

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 for five consecutive days is less than the greater of (a) $30 million; and (b) 10% of the commitments of the facility lenders.

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 20% and 12.5% (depending upon the type of restricted event) of the lenders' commitments or, if the company's consolidated fixed charge coverage ratio for the most recently completed four fiscal quarters is at least 1 time.

Bank of America Merrill Lynch is the lead arranger and bookrunner on the deal, and JPMorgan Chase Bank, NA and Citizens Business Capital are the co-documentation agents.

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

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