CSI Compressco reduces credit facility by $25 million, amends terms

By Tali Rackner

Norfolk, Va., Nov. 4 – CSI Compressco LP executed an amendment to its existing secured credit facility to convert the credit facility to an asset-based revolving facility, reduce the maximum aggregate lender commitments to $315 million from $340 million and modify some financial covenants, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent, collateral agent, letter-of-credit issuer and swingline lender.

The amendment provides for an increase in the applicable margin by 25 basis points in the event the consolidated total leverage ratio exceeds 5.5 times, resulting in a range for the interest rate of Libor plus 200 bps to Libor plus 325 bps, based on the consolidated total leverage ratio.

Borrowings under the credit agreement may not exceed a borrowing base equal to the sum of (a) 80% of the aggregate net amount of eligible accounts receivable plus (b) 20% of the aggregate value of any eligible spare parts, in the event the partnership has elected to include eligible spare parts pursuant to a notice to the administrative agent, plus (c) 80% of the net in-place eligible compressor equipment, decreased each month by the amount of depreciation expense associated with such eligible compressor equipment, plus (d) 80% of the cost of new eligible compressor equipment and minus (e) the amount of any reserves established by the administrative agent in its discretion.

Amended covenants require the company to maintain a maximum consolidated total leverage ratio of 5.75 times as of Sept. 30, 5.95 times from Dec. 31 through June 30, 2018, 5.75 times from Sept. 30, 2018 through Dec. 31, 2018 and 5.5 times from March 31, 2019 and thereafter.

In addition, the consolidated secured leverage ratio may not exceed 3.25 times from Sept. 30 through June 30, 2018 and 3.5 times from Sept. 30, 2018 and thereafter.

Furthermore, the consolidated interest coverage ratio may not exceed 2.25 times from Sept. 30 through June 30, 2018, 2.5 times from Sept. 30, 2018 to Dec. 31, 2018 and 2.75 times from March 31, 2019 and thereafter.

The Midland, Texas-based company is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage.

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