Superior Energy details $120 million asset-backed secured exit loan

By Sarah Lizee

Olympia, Wash., Feb. 3 – Superior Energy Services, Inc. detailed the terms of the $120 million asset-backed secured exit facility that it entered into upon its emergence from Chapter 11 bankruptcy.

The borrower of the facility is SESI, LLC, with JPMorgan Chase Bank, NA and Bank of America, NA as joint lead arrangers and bookrunners, JPMorgan as administrative agent, and BofA as syndication agent, according to an 8-K filing with the Securities and Exchange Commission.

The exit facility will mature on Dec. 9, 2024 and is subject to a borrowing base.

Total commitments under the exit credit facility may be increased to $170 million, subject to some conditions.

Borrowings will bear interest at Libor plus 300 basis points to 350 bps, based on a consolidated fixed charge coverage ratio.

In addition, SESI is required to pay a letter-of-credit fee ranging from 3% to 3.5% per annum on the basis of Superior’s consolidated fixed charge coverage ratio on the aggregate face amount of all outstanding letters of credit; to the issuing lender of each letter of credit, a fronting fee of no less than 0.25% per annum on the outstanding amount of each such letter of credit; and commitment fees of 0.5% per annum on the daily unused amount of the exit credit facility, in each case quarterly in arrears.

The credit agreement requires compliance with a fixed charge coverage ratio of 1 to 1 if an event of default has occurred and is continuing or availability under the exit credit agreement is less than the greater of $20 million or 15% of the aggregate commitments.

On the effective date, the exit credit agreement replaced SESI’s debtor-in-possession credit agreement, and $47.14 million of undrawn letters of credit issued under the DIP credit agreement were deemed issued under the exit credit agreement.

Based in Houston, Superior Energy provides oil field services and equipment. The company filed Chapter 11 bankruptcy on Dec. 7 under case number 20-35812 and emerged on Feb. 2.

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