Cal Dive reduces revolver to $150 million, increases interest rate

By Angela McDaniels

Tacoma, Wash., Oct. 10 - Cal Dive International, Inc. amended its revolving credit facility due April 2016, reducing its size to $150 million from $300 million.

The interest rate was increased to Libor plus 350 basis points to 425 bps. The exact spread depends on the company's consolidated leverage ratio, according to a company news release.

The prior spread over Libor was 250 bps to 325 bps.

The other changes made under the amendment include the following:

• The leverage ratio covenant was increased to 5 times for the fiscal quarter ending Dec. 31;

• For the fiscal quarter ending March 31, the amendment temporarily limits the size of the revolver at $75 million and requires the company to meet either the leverage ratio covenant of 5 times or have EBITDA for the trailing 12 months ending on March 31 of at least $25 million;

• The maximum leverage ratio allowed will increase to 5.75 times for the quarter ending June 30, 2012. It will then decrease to 4.25 times through Sept. 30, 2012, 4 times through Dec. 31, 2012 and 3.75 times thereafter.

Prior to the amendment, the maximum permitted leverage ratio was 4.25 times for the quarter ended Sept. 30 and 3.75x for the quarter ending Dec. 31 and thereafter;

• The EBITDA-to-interest financial covenant was eliminated and replaced by a fixed charge coverage ratio covenant that will begin on June 30, 2012, set at a minimum of 1.25 times; and

• The company will be allowed to exclude severance-related costs incurred in 2011 for purposes of calculating trailing-12-month EBITDA under all financial covenants.

The company had $34 million of outstanding borrowings under the revolver as of June 30.

The new interest rate also applies to the $150 million term loan portion of the credit facility. Excluding that change, the term loan was not affected by the amendment.

Bank of America, NA is the administrative agent.

Cal Dive is a marine contractor based in Houston that provides offshore construction services to the oil and natural gas industry.

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