Key Energy Services enters into $400 million five-year revolver

By Angela McDaniels

Tacoma, Wash., April 5 - Key Energy Services, Inc. entered into a $400 million revolving senior secured credit facility due March 31, 2016 on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA is the administrative agent and swing line lender, Bank of America, NA is the syndication agent and Capital One, NA and Wells Fargo Bank, NA are the co-documentation agents. J.P. Morgan Securities LLC and Bank of America Merrill Lynch were the joint lead arrangers and bookrunners.

The initial interest rate is adjusted Libor plus 250 basis points. The margin ranges from 225 bps to 300 bps, depending on leverage.

Under the revolver's covenants, the company must maintain a consolidated interest coverage ratio of at least 3 to 1 and a senior secured leverage ratio of no more than 2 to 1.

In connection with the new revolver, the company terminated its $300 million revolver due Nov. 29, 2012 with Bank of America and Wells Fargo. The interest rate was Libor plus 350 bps to 450 bps.

Key Energy is a Houston-based onshore, rig-based well servicing contractor.

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