Hornbeck amended revolver cuts limit to $200 million, raises pricing

By Wendy Van Sickle

Columbus, Ohio, Aug. 3 – Hornbeck Offshore Services, Inc. amended its revolving credit facility on July 29, reducing the borrowing base to $200 million from $300 million, amending some covenants and increasing pricing, according to a press release.

The Libor spread was increased by 25 basis points at all levels and now ranges from 225 bps to 325 bps. The unused commitment fee was increased by 50 bps at all levels.

Additionally, the minimum collateral-to-loan value ratio under the amended facility was restored to its prior level of 200% of the borrowing base, which had been reduced to 150% of the borrowing base when the facility was amended and extended in February 2015. Accordingly, the number of vessels pledged as collateral was increased to 12 from 10.

The amended credit facility reduces the minimum interest coverage ratio to 1.00x with step-ups to 1.25x in the third quarter of 2018 and 1.50x in the first quarter of 2019. Previously, the ratio was 3.00x.

Also, the step-down in the total debt-to-capitalization ratio from 55% to 50% was delayed by six quarters to the third quarter of 2018.

Hornbeck has the option to make a one-time election to suspend the interest coverage ratio for a period of no more than four quarters, ending no later than the fourth quarter of 201. In the event of such an interest coverage holiday, the borrowing base will be capped at $75 million for that period and the Libor spreads will be increased by an additional 50 bps during and after the holiday.

The amended revolving credit facility also limits Hornbeck’s cash balance to $50 million at any time the facility is drawn, increases the minimum liquidity level required for prepayment of the company’s 2019 convertible senior notes, 2020 senior notes and 2021 senior notes to $150 million from $100 million and increases the minimum liquidity level to permit a merger, formation or acquisition of a subsidiary to $100 million from $20 million.

The company said it was in compliance with all of the covenants of the revolver for the quarter ended June 30 and remains in compliance thereafter.

As of Wednesday, there were no amounts drawn under the revolver.

Hornbeck is a Covington, La.-based provider of offshore supply vessels.

© 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.