Hornbeck Offshore Services, Inc. (NYSE:HOS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On June 15, 2017, Hornbeck Offshore Services, Inc., or the
Company, announced the closing of a new $300 million first-lien
delayed-draw term loan credit facility dated as of June 15, 2017
by and among the Company, as Parent Borrower, Hornbeck Offshore
Services, LLC, or HOS, as Co-Borrower, certain holders of the
Companys outstanding notes, or the Initial Lenders, and
Wilmington Trust, National Association, as Administrative Agent
and Collateral Agent for the lenders, or the New Credit Facility.
The New Credit Facility refinanced the Companys $200 million
existing senior secured revolving credit facility, dated as of
February 6, 2015 and subsequently amended, with Wells Fargo Bank,
National Association, as Administrative Agent, and the lenders
party thereto, or the Old Credit Facility. The New Credit
Facility is guaranteed by the Parent Borrowers significant
domestic subsidiaries other than HOS. The six-year term of the
New Credit Facility extends the maturity of the Old Credit
Facility from February 2020 to June 2023.
Company, announced the closing of a new $300 million first-lien
delayed-draw term loan credit facility dated as of June 15, 2017
by and among the Company, as Parent Borrower, Hornbeck Offshore
Services, LLC, or HOS, as Co-Borrower, certain holders of the
Companys outstanding notes, or the Initial Lenders, and
Wilmington Trust, National Association, as Administrative Agent
and Collateral Agent for the lenders, or the New Credit Facility.
The New Credit Facility refinanced the Companys $200 million
existing senior secured revolving credit facility, dated as of
February 6, 2015 and subsequently amended, with Wells Fargo Bank,
National Association, as Administrative Agent, and the lenders
party thereto, or the Old Credit Facility. The New Credit
Facility is guaranteed by the Parent Borrowers significant
domestic subsidiaries other than HOS. The six-year term of the
New Credit Facility extends the maturity of the Old Credit
Facility from February 2020 to June 2023.
The New Credit Facility enhances the Companys financial
flexibility by (i) increasing liquidity from the currently
applicable borrowing base of $75 million under the Old Credit
Facility, (ii) extending the maturity date that existed under the
Old Credit Facility by over three years, and (iii) eliminating
all of the existing financial ratio maintenance covenants and the
anti-cash hoarding provision of the Old Credit Facility. The New
Credit Facility contains customary representations and
warranties, covenants and events of default.
flexibility by (i) increasing liquidity from the currently
applicable borrowing base of $75 million under the Old Credit
Facility, (ii) extending the maturity date that existed under the
Old Credit Facility by over three years, and (iii) eliminating
all of the existing financial ratio maintenance covenants and the
anti-cash hoarding provision of the Old Credit Facility. The New
Credit Facility contains customary representations and
warranties, covenants and events of default.
The Company can use the amounts it draws under the New Credit
Facility for working capital and general corporate purposes,
including the acquisition of distressed assets and/or the
refinancing of existing debt, subject to, among other things,
compliance with certain covenants requiring the Company to
maintain access to available liquidity (cash and credit
availability) of $25 million at all times. The minimum liquidity
level required for prepayment of the Companys existing
indebtedness and/or certain other restricted payments is $65
million.
Facility for working capital and general corporate purposes,
including the acquisition of distressed assets and/or the
refinancing of existing debt, subject to, among other things,
compliance with certain covenants requiring the Company to
maintain access to available liquidity (cash and credit
availability) of $25 million at all times. The minimum liquidity
level required for prepayment of the Companys existing
indebtedness and/or certain other restricted payments is $65
million.
The Company is required to draw on a cumulative basis (i) at
least $68 million of the delayed-draw commitments under the New
Credit Facility by December 31, 2017, (ii) at least $136 million
of such commitments by December 31, 2018, and (iii) the full
amount of such commitments by September 1, 2019. The right to
borrow any amount of the delayed-draw commitments not drawn by
the respective minimum funding dates will be terminated.
least $68 million of the delayed-draw commitments under the New
Credit Facility by December 31, 2017, (ii) at least $136 million
of such commitments by December 31, 2018, and (iii) the full
amount of such commitments by September 1, 2019. The right to
borrow any amount of the delayed-draw commitments not drawn by
the respective minimum funding dates will be terminated.
>>The New Credit Facility is collateralized by 51 domestic
high-spec OSVs and MPSVs, including a security interest in two
pending MPSV newbuilds, and associated personalty, as well as by
certain deposit and securities accounts, or the Collateral.
Subject to the foregoing and certain limitations, the Companys
other assets that do not arise from, are not required for use in
connection with, and are not necessary for, the operation of
mortgaged vessels are unencumbered by liens, including ten
low-spec domestic OSVs and eleven foreign-flagged vessels.
high-spec OSVs and MPSVs, including a security interest in two
pending MPSV newbuilds, and associated personalty, as well as by
certain deposit and securities accounts, or the Collateral.
Subject to the foregoing and certain limitations, the Companys
other assets that do not arise from, are not required for use in
connection with, and are not necessary for, the operation of
mortgaged vessels are unencumbered by liens, including ten
low-spec domestic OSVs and eleven foreign-flagged vessels.
Borrowings under the New Credit Facility accrue interest, at the
Companys option, at either:
Companys option, at either:
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an adjusted London Interbank Offered Rate (subject to a
1.00% floor) plus (a) 6.00% during the first year of the New Credit Facility, (b) 6.50% during the second year of the New Credit Facility, (c) 7.00% during the third year of the New Credit Facility, (d) 7.25% during the fourth year of the New Credit Facility, and (e) 7.50% thereafter; or |
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the greatest of (a) the prime rate announced by The Wall
Street Journal, (b) the Federal Funds Effective Rate in effect on such day plus1/2 of 1%, and (c) the London Interbank Offered Rate plus, 1%, plus, for |
either (a), (b), or (c), a margin of (i) 5.00% during the first
year of the New Credit Facility, (ii) 5.50% during the second
year of the New Credit Facility, (iii) 6.00% during the third
year of the New Credit Facility, (iv) 6.25% during the fourth
year of the New Credit Facility, and (v) 6.50% thereafter.
year of the New Credit Facility, (ii) 5.50% during the second
year of the New Credit Facility, (iii) 6.00% during the third
year of the New Credit Facility, (iv) 6.25% during the fourth
year of the New Credit Facility, and (v) 6.50% thereafter.
The Company also has the option, exercisable anytime or from
time-to-time during the six-year term of the loan, of paying
interest on the New Credit Facility in-kind (accruing to the
outstanding principal of the loan, or PIK Interest), subject to
a 100 basis-point step-up in interest rate and a minimum 3%
cash-pay coupon for so long as the Company elects to pay PIK
Interest, subject to any and all debt incurrence and permitted
lien restrictions then in effect under any outstanding loan
agreements or bond indentures as of the time of such increase
in principal.
time-to-time during the six-year term of the loan, of paying
interest on the New Credit Facility in-kind (accruing to the
outstanding principal of the loan, or PIK Interest), subject to
a 100 basis-point step-up in interest rate and a minimum 3%
cash-pay coupon for so long as the Company elects to pay PIK
Interest, subject to any and all debt incurrence and permitted
lien restrictions then in effect under any outstanding loan
agreements or bond indentures as of the time of such increase
in principal.
The New Credit Facility may be prepaid at (i) 102% of the
principal amount repaid if such repayment occurs on or prior to
June 15, 2018, (ii) at 101% of the principal amount repaid if
such repayment occurs after June 15, 2018 but on or prior to
June 15, 2019, and (iii) at 50% of the principal amount repaid
if such repayment occurs after June 15, 2019.
principal amount repaid if such repayment occurs on or prior to
June 15, 2018, (ii) at 101% of the principal amount repaid if
such repayment occurs after June 15, 2018 but on or prior to
June 15, 2019, and (iii) at 50% of the principal amount repaid
if such repayment occurs after June 15, 2019.
The foregoing is a summary only, is not necessarily complete,
and is qualified by the full text of the First Lien Term Loan
Agreement and the First Lien Guaranty and Collateral Agreement
filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively.
and is qualified by the full text of the First Lien Term Loan
Agreement and the First Lien Guaranty and Collateral Agreement
filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively.
A copy of the press release related to this event is attached
as Exhibit 99.1.
as Exhibit 99.1.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The information under Item 1.01 is incorporated herein by
reference.
reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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10.1
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First Lien Term Loan Agreement dated as of June 15,
2017 by and among the Company, as Parent Borrower, Hornbeck Offshore Services, LLC, as Co-Borrower, Wilmington Trust, National Association, as Administrative Agent, Wilmington Trust, National Association, as Collateral Agent, and the lenders party thereto. |
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10.2
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First Lien Guaranty and Collateral Agreement dated as
of June 15, 2017 by and among the Company, as Parent Borrower, Hornbeck Offshore Services, LLC, as Co-Borrower, Wilmington Trust, National Association, as Collateral Agent, and the obligors signatory thereto. |
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99.1
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Press Release, dated June 15, 2017.
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About Hornbeck Offshore Services, Inc. (NYSE:HOS)
Hornbeck Offshore Services Inc. provides marine transportation, subsea installation and accommodation support services to exploration and production, oilfield service, offshore construction and the United States military customers. The Company focuses on providing marine solutions for the deepwater and ultradeepwater energy industry in domestic and select foreign locations. The Company, through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels (MPSVs), and a shore-base facility to provide logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the United States, Gulf of Mexico, Latin America and selected international markets. Its OSVs and MPSVs support the deep-well, deepwater and ultra-deepwater activities of the offshore oil and gas industry. It provides vessel management services for other vessel owners, such as crewing, daily operational management and maintenance activities.
