Gibson Energy amends loan to lift revolver and LOC subfacility amount

By Jennifer Chiou

New York, Sept. 23 - Gibson Energy ULC and some of its subsidiaries entered into an amendment and restatement of their credit agreement, pushing the availability under the revolving credit facility by $50 million to $200 million on Sept. 17, according to a 6-K filing with the Securities and Exchange Commission.

The changes also increased the letter-of-credit subfacility to $100 million from $75 million while also establishing a $30 million U.S. credit facility to be used for the company's or its subsidiaries' U.S. operations.

Further, the amendments permit Royal Bank of Canada, as a lender, to front letters of credit under the LOC subfacility up to an amount of $50 million and also allow PNC Bank, NA or its affiliates to commit to lend up to $40 million under the facility and to front letters of credit up to $30 million.

Gibson also said that the changes authorize Bank of Montreal to increase its commitment under the amended and restated credit agreement to $40 million.

In addition, the company will be required to maintain a fixed-charge coverage ratio of not less than 1.10 to 1.

Interest rates were left unchanged, but the threshold amounts of average excess availability were modified. With average excess availability equal to or more than $125 million, the applicable margin will be Libor plus 275 basis points, increasing to:

• Libor plus 300 bps with average excess availability of $100 million to $125 million;

• Libor plus 325 bps with average excess availability of $75 million to $100 million; and

• Libor plus 350 bps with average availability less than $75 million.

Gibson is a Calgary, Alta., midstream energy company.

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