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Omega Protein enters five-year $125 million revolving credit facility
By Wendy Van Sickle
Columbus, Ohio, Aug. 24 – Omega Protein Corp. amended and restated its loan agreement on Thursday to provide for a new five-year $125 million revolving credit agreement, according to an 8-K filing with the Securities and Exchange Commission.
The facility’s interest ranges from Libor (or CDOR in the case of Canadian borrowings) plus 125 basis points to 175 bps, based on the leverage ratio. Initially, interest is at Libor/CDOR plus 125 bps.
There is a commitment fee of 20 bps to 30 bps.
Wells Fargo Securities, LLC acted as lead arranger and book manager, and Wells Fargo Bank, NA as administrative agent.
The agreement allocates up to $95 million for revolving A loans in U.S. dollars or alternative currencies and up to $30 million in revolving B loans in U.S. or Canadian dollars.
The facility has a $75 million accordion feature.
It also includes a $10 million sub-facility for swingline loans, a $20 million sub-facility for standby letters of credit, a $7.5 million sub-facility for standby or commercial letters of credit issued for the account of subsidiary Bioriginal Food & Science Corp.
Financial covenants include a minimum consolidated tangible net worth requirement; a consolidated leverage ratio of no greater and 3 to 1 and a consolidated fixed-charge coverage ratio of at least 1.25 to 1.
The facility replaces Omega’s $70 million credit facility as well as subsidiary Bioriginal Canada’s C$20 facility and is expected to lower total revolving credit costs, according to a press release.
Some proceeds of the new revolver were used to prepay $8.4 million of Title XI loans, with coupons ranging from 6.5% to 7% and maturity dates occurring through 2020. Omega expects this will result in interest savings of about $400,000 to $600,000 over the next year.
Omega, based in Houston, processes fish meal and fish oil products.
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