Spark Energy restates credit facility for $85 million revolvers

By Marisa Wong

Madison, Wis., July 9 – Spark Energy, Inc. amended and restated its existing senior credit facility on July 8 for a $60 million senior secured revolving working capital facility and a $25 million secured revolving line of credit, according to an 8-K filing with the Securities and Exchange Commission.

The previous facility totaled $70 million, according to a press release.

SG Americas Securities, LLC and Compass Bank are co-lead arrangers; SG Americas Securities, LLC is bookrunner; Societe Generale is administrative agent; Compass Bank is syndication agent; and Rabobank Nederland, New York Branch is documentation agent.

The secured revolving credit line is to be used specifically for the financing of up to 75% of the cost of acquisition transactions, with the remainder to be financed either through cash on hand or the issuance of subordinated debt. The company said the purchase price for its acquisition of CenStar Energy Corp. will be financed using roughly $6.2 million of availability under the acquisition credit line.

The restated credit facility will mature on July 8, 2017 and may be extended by one year with lender consent.

Borrowings under the acquisition line will be repaid 25% per year with the remaining 50% due at maturity.

Interest under the $60 million working capital line will be Libor plus an applicable margin of up to 300 basis points, depending on utilization. The interest rate is generally reduced by 25 bps if utilization is below 50%.

Borrowings under the $25 million acquisition line will bear interest at Libor plus an applicable margin of up to 375 bps, also based on utilization.

There is a commitment fee of 37.5 bps to 50 bps on the unused portion of the working capital line, depending on the unused capacity, and 50 bps on the unused portion of the acquisition line.

Availability under the working capital line is subject to a borrowing base.

The credit facility contains covenants that require the maintenance of specified ratios or conditions, including minimum net working capital, minimum adjusted tangible net worth, minimum fixed-charge coverage ratio and maximum total leverage ratio.

The retail energy services company is based in Houston.

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