Helix Energy Solutions Group Inc. (NYSE: HLX) entered into a credit agreement with a syndicated bank lending group in the amount of US $900 million.
The agreement consists of a US $600 million revolving credit facility and a US $300 million term loan.
The term loan will be funded in conjunction with the early redemption of the company’s remaining US $275 million senior unsecured notes. The new facility replaces the company’s existing credit facility that would have expired in July 2015.
The key features of the new secured credit facility include:
• Initial pricing at Libor plus 275 basis points, with an undrawn fee of 50 basis points;
• Annual amortization payments on the term loan of 5% in years one and two, and 10% per annum in years three through five with a balloon payment at maturity;
• US $200 million accordion feature; and
• Five year term.
In conjunction with the new credit agreement, Helix notified the trustee of its 9.5% senior unsecured notes of the company’s intent to redeem all of the outstanding notes. On July 22, Helix will redeem the US $275 million outstanding notes with the proceeds from its new term loan. Helix will pay a call premium of US $6.5 million for early redemption of the notes and will incur a noncash charge of US $8.7 million to expense the deferred charges associated with the existing credit facility and senior unsecured notes.
The new credit facility along with the early redemption of senior unsecured notes provides Helix with a lower cost of capital along with the financial support to execute the strategy of growing its well intervention and robotics businesses, said Anthony Tripodo, Helix’s executive vice president and chief financial officer, in the release.
Merrill Lynch, Pierce Fenner & Smith Inc. and Wells Fargo Securities LLC are joint lead arrangers and joint book-running managers of the new facilities. Bank of America NA is administrative agent.
Helix Energy Solutions Group Inc. is an offshore energy company focused on providing specialty services to the offshore energy industry in the US, the UK, and internationally. The company is headquartered in Houston.
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