Horizon obtains $65 million credit facility, plans to move ahead with recapitalization

New York, March 17 - Horizon Offshore, Inc. said it agreed principal terms of a new $65 million credit facility which, assuming it is completed, will allow the company to refinance and restructure its debt maturing in 2005, exchange a significant portion of its 16% and 18% subordinated secured notes for equity and obtain additional working capital financing to replace its revolving credit facilities with Southwest Bank of Texas NA that were repaid in February.

The new financing is with Manchester Securities Corp., an affiliate of Elliott Associates LP.

It will be structured as a $25 million senior secured term loan and a $40 million senior secured revolving line of credit, both secured by first or second liens on all assets.

The term loan will carry interest at 15%, 10% in cash and 5% in kind. It will amortize by $500,000 per month and mature on March 31, 2007.

The revolver will carry interest at 10%, 8% in cash and 2% in kind and also mature on March 31, 2007.

The facility has a 2% closing fee and a 50 basis point per quarter monitoring fee.

Horizon Offshore said it intends to use proceeds to refinance its revolving credit facility maturing in May 2005 and for other general corporate purposes, including to provide working capital to support operations.

The company intends to restructure its term loan with The CIT Group/Equipment Financing, Inc.

The new lenders and the holders of the company's 16% and 18% subordinated secured notes and existing redeemable preferred stock will exchange $85 million of subordinated secured notes and all of the preferred stock for equity securities equivalent to 95% of the outstanding common stock.

Horizon expects to have $25 million of the subordinated secured notes outstanding after closing.

The recapitalization will replace one signed on Oct. 24, 2004 that would have left $45 million of the notes outstanding.

Horizon Offshore is a Houston-based provider of marine construction services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.