Willbros subsidiary amends credit facility to allow asset disposals

By Angela McDaniels

Tacoma, Wash., March 9 - Willbros Group, Inc. subsidiary Willbros United States Holdings, Inc. amended its credit facility on Friday to allow Willbros Group to make dispositions of some equipment, real estate and business units, according to an 8-K filing with the Securities and Exchange Commission.

In most cases, Willbros Group would have to use the proceeds from these dispositions to pay down its existing term loans.

The company said the credit facility's financial covenants and associated definitions were also amended to allow it to carry out its business plan and to clarify the treatment of some items.

In connection with the amendment, Willbros Group agreed to limit its revolver borrowings under the credit agreement to $25 million - with the exception of borrowings used to make any payments on the company's 6.5% convertible senior notes due 2012 and 2.75% convertible senior notes due 2024 - until Willbros Group's total leverage ratio is 3 to 1 or less.

The amendment does not impose any sublimit on letters of credit.

The amendment modifies the definition of "excess cash flow" to include proceeds from Willbros Group's TransCanada Pipeline arbitration, which would require Willbros Group to use all or a portion of these proceeds to further pay down the term loan in the year following the fiscal year in which the proceeds are received. The arbitration is related to an ongoing dispute with TransCanada about work performed in 2009 by a subsidiary of Willbros Group.

For prepayments made with net debt proceeds or equity issuance proceeds, as those terms are defined in the credit agreement, the amendment requires a prepayment premium of 4% for term loans prepaid before Dec. 31, 2011 and 1% for term loans prepaid on and after Dec. 31, 2011 but before Dec. 31, 2012.

The premiums for prepayments made with proceeds other than net debt proceeds or equity issuance proceeds are unchanged.

Each of the amendments is deemed to be effective as of the end of 2010.

Credit Agricole Corporate and Investment Bank is the administrative agent.

Willbros Group is a Houston-based independent contractor for the oil, gas, power, refining and petrochemical industries.

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