Great Lakes gets waiver of default under revolver, international LoC

By Marisa Wong

Madison, Wis., March 19 - Great Lakes Dredge & Dock Corp. executed an amendment and waivers to two of its credit agreements on March 15, waiving events of default arising from failure to meet a particular financial covenant, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the company entered into a waiver and amendment to its credit agreement dated June 4, 2012 with Wells Fargo Bank, NA as administrative agent and a waiver to its international letter-of-credit agreement dated Sept. 29, 2006 with Wells Fargo Bank.

The company announced on March 14 that it was not in compliance with one of the financial covenants under its senior revolving credit facility and its international letter-of-credit facility. Both facilities require the company to maintain a minimum fixed charge coverage ratio of 1.25 to 1.0. The company's fixed charge coverage ratio as of Dec. 31 was 1.12 times, resulting in an event of default under both facilities.

According to the filing, the company also determined that a perfection trigger event had occurred under the revolver. As a result, the outstanding obligations under the revolver are now secured by liens on some of the company's vessels and all of its domestic accounts receivable.

Under the original terms of the credit agreement, obligations that become secured under these circumstances could again become unsecured provided that no event of default has occurred and is continuing and that the company has maintained for two consecutive quarters, and is projected to maintain for the next two consecutive quarters, a total leverage ratio less than or equal to 3.75 to 1.0.

This provision was amended to add an additional condition that no release of the liens securing the obligations under the facility can occur until the company has delivered its audited financial statements for the fiscal year ending Dec. 31, 2013.

The company also said on March 14 that it would amend its quarterly reports for the periods ended June 30, 2012 and Sept. 30 and restate the included financial statements. The waivers also cover any defaults relating to these restatements, the filing noted.

Great Lakes is an Oak Brook, Ill.-based provider of dredging services.

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