By Lisa Kerner
Charlotte, N.C., March 24 – Tetra Technologies, Inc. agreed on March 18 to sell $50 million of senior secured notes due April 1, 2017 to Wells Fargo Energy Capital, Inc.
The principal portion of each of the notes will consist entirely of tranches that bear interest at Libor plus an applicable margin or the base rate plus an applicable margin, and each tranche will be at least $5 million, according to an 8-K filing with the Securities and Exchange Commission.
There may not be more than a total of three Libor tranches outstanding at any time.
The applicable margin with respect to Libor tranches will be 375 basis points until Dec. 31, 2015, 425 bps from Jan. 1, 2016 to June 30, 2016, 475 bps from July 1, 2016 to Dec. 31, 2016 and 525 bps from Jan. 1, 2017 until maturity.
Interest on Libor tranches will be paid in arrears on interest periods of one, two, three or six months, as Tetra may have elected, the filing stated.
Tetra may prepay at any time all, or from time to time any part, of the notes, in an amount not less than $1 million in the case of a partial prepayment, at 101% of the principal amount so prepaid if prepaid on or prior to July 1, 2015 or 100% of the principal amount so prepaid if prepaid after July 1, 2015.
Upon a change of control, the company will be required to offer to prepay all the notes at 101% of the principal amount if prepaid on or prior to July 1, 2015 or 100% of the principal amount if prepaid after July 1, 2015.
Under the terms of the note purchase agreement, Tetra will not permit the interest coverage ratio at the end of any fiscal quarter to be less than 2.5 to 1.
Additionally, Tetra will not permit the ratio of consolidated funded debt as of the end of any fiscal quarter to EBITDA to be greater than 3.5 to 1.
The company expects to issue the notes April 30.
Proceeds from the sale of the notes, along with other available funds, will be used to repay in full all amounts owed in respect of Tetra’s senior series 2008-B notes due April 30, 2015.
Tetra is a Woodlands, Texas-based oil and gas services and production company.
| Issuer: | Tetra Technologies, Inc.
|
| Issue: | Senior secured notes
|
| Amount: | $50 million
|
| Maturity: | April 1, 2017
|
| Coupon: | Libor plus 375 bps until Dec. 31, 2015, Libor plus 425 bps from Jan. 1, 2016 to June 30, 2016, Libor plus 475 bps from July 1, 2016 to Dec. 31, 2016 and Libor plus 525 bps from Jan. 1, 2017 until maturity
|
| Price: | Par
|
| Call option: | At 101 on or prior to July 1, 2015 or par after July 1, 2015
|
| Put option: | Upon a change of control at 101 on or prior to July 1, 2015 or par after July 1, 2015
|
| Pricing date: | March 18
|
| Settlement date: | April 30
|
| Purchaser: | Wells Fargo Energy Capital, Inc.
|
| Distribution: | Private placement
|
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