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 28, 2019, Hornbeck Offshore Services, Inc. (the “Company”) entered into a new $100 million senior secured asset-based revolving credit facility by and among the Company, as Borrower, certain of the Company’s subsidiaries, as guarantors, certain lenders, and CIT Northbridge Credit LLC as Administrative Agent and Collateral Agent for the lenders (the “Senior Credit Facility”). The Senior Credit Facility is guaranteed by certain of the Company’s domestic and foreign subsidiaries and contains customary representations and warranties, covenants and events of default.
The fully-funded Senior Credit Facility is secured by first priority liens on certain eligible receivables, certain restricted cash amounts and related assets. The Senior Credit Facility will be comprised of two tranches that will rebalance each month based on the variable receivable-backed borrowing base. The unrestricted receivables-backed tranche will mature in 2022, whereas the restricted cash-backed tranche will mature in 2025. The receivables-backed tranche may be used, subject to the completion of applicable eligibility review procedures, for working capital and general corporate purposes, including the refinancing or repayment of existing debt, subject to, among other things, compliance with certain requirements. The cash-backed tranche may, over time, rebalance to the receivables-backed tranche as eligible receivables increase and may be refinanced over time.
Borrowings under the Senior Credit Facility accrue interest at LIBOR plus a floating-rate spread of 5.00% for the life of the facility. The Company may, at its option from time to time, prepay loans under either tranche of the Senior Credit Facility. Fifty percent (50%) of such loans available under the Senior Credit Facility is subject to a prepayment premium (i) at 103% of the principal amount repaid if such repayment occurs on or prior to June 28, 2020; (ii) at 102% of the principal amount repaid if such repayment occurs on or prior to June 28, 2021; (iii) at 101% of the principal amount repaid if such repayment occurs on or prior to December 28, 2021 and (iv) at 50% of the principal amount repaid if such repayment occurs after December 28, 2021, with such premiums subject to adjustments downward under certain circumstances. The other fifty percent (50%) of such loans may be repaid at any time without a prepayment penalty.
The foregoing is only a summary, is not necessarily complete, and is qualified by the full text of the Senior Credit Agreement, the Guaranty and Security Agreement and the ABL/Term Intercreditor Agreement filed herewith as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively.
Also filed herewith as Exhibit 99.1 is apress release to be released on Monday July, 8, 2019 in substantially the form attached hereto.
At the request of certain holders of the Company’s Senior Notes (described below), on May 8, 2019, the Company executed an Instrument of Resignation, Appointment and Acceptance (the “Trustee Instrument”) with Wells Fargo Bank, National Association (“Wells Fargo”), as resigning trustee, and Wilmington Trust, National Association (“Wilmington Trust), as successor trustee, with respect to the indenture dated March 16, 2012 (the “2012 Indenture”)
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