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JPMorgan Chase Agents Superior Energy’s Facility Amendment

February 23, 2016, 07:17 AM
Filed Under: Energy Services

Superior Energy Services, Inc. (the “Company”) entered into a Fourth Amended and Restated Credit Agreement dated as of February 22, 2016 (the “ Credit Agreement”) among the Company, as a guarantor, SESI, L.L.C., as the borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders named therein providing for a $470.3 million three-year secured revolving credit facility. The new revolving credit facility replaces the Company’s existing $600.0 million revolving credit and $325.0 million term loan facility, which was scheduled to mature in February 2017.

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default that are consistent with those contained in the existing revolving credit and term loan facility. However, the maximum leverage ratio was increased and will be calculated on a net debt basis giving effect to domestic cash in excess of $100 million through the fourth quarter of 2017. Commencing with the first quarter of 2018, the maximum leverage ratio cannot exceed 4.25 to 1 and will be computed based on the basis of total debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company has also agreed to maintain a $150.0 million cash balance if its ratio of net debt to EBITDA is less than or equal to 4.6 to 1 and $200.0 million if the ratio exceeds 4.6 to 1. The new revolving credit facility will also be reduced by $10.0 million (subject to a floor of $400.0 million for the facility) for each quarter that the ratio of the total debt to EBITDA is greater than 4.0 to 1.

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