KBR enters into new $1 billion unsecured revolving credit agreement

By Tali Rackner

Norfolk, Va., Oct. 1 – KBR, Inc. entered into a new $1 billion unsecured revolving credit agreement on Sept. 25 with Citibank NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

There is an up to $500 million accordion feature.

The revolver expires on Sept. 25, 2020 and has two one-year extension options.

Borrowings will bear interest at Libor plus a margin of 137.5 basis points initially and can range from a margin of 137.5 bps to 175 bps based on the ratio of consolidated debt to consolidated EBITDA. The letter-of-credit fee is also 137.5 bps to 175 bps.

The commitment fee is 22.5 bps initially and ranges from 22.5 bps to 25 bps.

Certain financial covenants require KBR to maintain a consolidated debt to consolidated EBITDA ratio of 3.5 times and a minimum consolidated net worth of $1.2 billion plus 50% of consolidated net income for each quarter ending on or after Sept. 30 and 100% of any increase in shareholder equity attributable to the sale of equity securities.

Bank of America, NA, ING Bank, NV, Dublin Branch, BNP Paribas Securities Corp. and Bank of Nova Scotia are syndication agents and are joint lead arrangers along with Citigroup Global Markets Inc. and Bank of America Merrill Lynch.

The new credit agreement replaces the five-year unsecured revolving credit agreement dated Dec. 2, 2011.

KBR is an engineering, construction and services company based in Houston.

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