Helix Energy Solutions Group, Inc. (NYSE: HLX) announced today that it has entered into a credit agreement with a syndicated bank lending group in the amount of $900 million, consisting of a $600 million revolving credit facility and a $300 million term loan. The term loan will be funded in conjunction with the early redemption of the Company’s remaining $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 1 and 2, and 10% per annum in years 3 through 5 with a balloon payment at maturity
- $200 million accordion feature
- 5 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 $275 million outstanding notes with the proceeds from its new term loan. Helix will pay a call premium of $6.5 million for early redemption of the notes and will incur a noncash charge of $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 our Senior Unsecured Notes provides Helix with a lower cost of capital along with the financial support to execute our strategy of growing our well intervention and robotics businesses,” commented Anthony Tripodo, Executive Vice President and Chief Financial Officer of Helix.
Merrill Lynch, Pierce Fenner & Smith Inc., and Wells Fargo Securities, LLC acted as Joint Lead Arrangers and Joint Bookrunning Managers of the new facilities. Bank of America, N.A. will continue to serve as Administrative Agent.