Key Energy seeks $175 million revolver

By Sara Rosenberg

New York, Oct. 29 - Key Energy Services Inc. is seeking a new $175 million four-year revolver from some members of its current bank group. The facility is expected to close in November.

PNC Capital Markets and Wells Fargo acted are co-lead arrangers on the existing $150 million revolver, PNC Bank is the administrative agent and Credit Lyonnais, Lehman Commercial Paper and Royal Bank of Canada are co-documentation agents.

The new facility would be used to replace the company's existing $150 million revolver, which is set to expire in July 2005.

Compared to the existing facility, the new one is expected to have a lower interest rate, an enhanced covenant package designed to accommodate the company's growth strategy and an extended term, according to a news release.

Pricing on the existing $150 million revolver is based on total senior debt to EBIDTA. Initially, the loan bore interest at Libor plus 225 basis points.

Proceeds from the new revolver will be used for short-term working capital, letters of credit and flexibility to reduce/refinance higher cost debt.

Key Energy is a Midland, Tex. rig-based onshore well service company.

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