TETRA Technologies, Inc. (NASDAQ:TTTNW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Definitive Material Agreement.
Amendment to Credit Agreement
On December 22, 2016, TETRA Technologies, Inc., a Delaware
corporation (the Company) and certain of its subsidiaries entered
into an Agreement and Fifth Amendment to Credit Agreement (the
Fifth Amendment) with JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders party thereto. The Fifth
Amendment amends the Credit Agreement dated as of June 27, 2006,
as previously amended (as amended, the Credit Agreement).
The Fifth Amendment amended the consolidated leverage ratio
covenant so that the consolidated leverage ratio may not exceed
(a) 5.00 to 1 at the end of the Companys fiscal quarters ending
during the period from and including March 31, 2017 through and
including December 31, 2017, (b) 4.75 to 1 at the end of the
Companys fiscal quarters ending March 31, 2018 and June 30, 2018,
(c) 4.50 to 1 at the end of the Companys fiscal quarters ending
September 30, 2018 and December 31, 2018, and (d) 4.00 to 1 at
the end of each of the Companys fiscal quarters thereafter.The
Fifth Amendment provides that no consolidated leverage ratio
covenant is applicable for the Companys fiscal quarter ending
December 31, 2016.
In addition, the Fifth Amendment provides for the following other
changes related to the Credit Agreement: (i) reduced the maximum
aggregate lender commitments from $225 million to $200 million;
(ii) reduced the amount of the Companys permitted unsecured
indebtedness from $100 million to $50 million; (iii) reduced the
amount of permitted acquisitions to either $25 million or $50
million, based upon a pro forma leverage ratio calculation; and
(iv) imposed a restriction that the Company not use more than $15
million of the $114.9 million of gross proceeds realized in
December 2016 from the issuance of equity by the Company to
prepay any indebtedness under the Amended and Restated GSO Note
Purchase Agreement (as defined below).
Borrowings under the credit facility following the Fifth
Amendment generally bear interest at the British Bankers
Association LIBOR rate or an alternate base rate, in each case
plus an additional margin based on the consolidated leverage
ratio as set forth below:
|
Leverage Ratio |
Eurocurrency Spread |
ABR Spread |
Commitment Fee Rate |
|
Category 1: greater than or equal to 4.00 to 1 |
4.25% |
1.00% |
1.00% |
|
Category 2: greater than or equal to 3.50 to 1 but less |
4.00% |
0.75% |
0.75% |
|
Category 3: greater than or equal to 3.00 to 1 but less |
3.75% |
0.50% |
0.75% |
|
Category 4: greater than or equal to 2.50 to 1 but less |
3.50% |
0.00% |
0.50% |
|
Category 5: greater than or equal to 2.00 to 1 but less |
2.75% |
0.00% |
0.50% |
|
Category 6: less than 2.00 to 1 |
2.50% |
0.00% |
0.35% |
Certain of the lenders under the Credit Agreement and their
affiliates have in the past provided, and may from time to time
in the future provide, commercial banking, financial advisory,
investment banking and other services to the Company and its
subsidiaries. They have received, and may receive in the future,
customary fees and commissions for these transactions.
The foregoing description of the Fifth Amendment does not purport
to be complete and is subject to, and qualified in its entirety
by, reference to the full text of the Fifth Amendment, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
and incorporated herein by reference.
Amendment to Amended and Restated Note Purchase Agreement
On December 22, 2016, the Company entered into a First Amendment
to Amended and Restated Note Purchase Agreement (the Note
Purchase Agreement Amendment) with GSO Tetra Holdings LP (GSO).
The Note Purchase Agreement Amendment amends that certain Amended
and Restated GSO Note Purchase Agreement (the Amended and
Restated GSO Note Purchase Agreement), dated July 1, 2016, by and
between the Company and GSO, relating to the previous issuance
and sale of $125 million aggregate principal amount of the
Companys 11.00% Senior Notes due November 5, 2022 (the Notes).
The Notes were sold to GSO in a private placement exempt from the
registration requirements of the Securities Act of 1933, as
amended (the Securities Act).
The Note Purchase Agreement Amendment replaced and modified
certain financial covenants in the Amended and Restated GSO Note
Purchase Agreement as follows:
|
(i) |
The fixed charge coverage ratio was amended so that the |
|
|
(ii) |
the ratio of consolidated funded indebtedness to EBITDA |
|
The Note Purchase Agreement Amendment provides for the following
other changes related to the Amended and Restated GSO Note
Purchase Agreement: (i) reduced the amount of the Companys
permitted indebtedness under the Credit Agreement from $225
million to $200 million; (ii) reduced the amount of the Companys
permitted unsecured indebtedness from $100 million to $50
million; and (iii) reduced the amount of permitted acquisitions
to either $25 million or $50 million, based upon a pro forma
leverage ratio calculation.
The foregoing description of the Note Purchase Agreement
Amendment does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the full text of the
Note Purchase Agreement Amendment, a copy of which is filed as
Exhibit 4.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off Balance Sheet Arrangement of a
Registrant.
The information set forth in Item 1.01 of this Current Report on
Form 8-K is hereby incorporated by reference in this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit Number |
Description |
|
4.1 |
First Amendment to Amended and Restated Note Purchase |
|
10.1 |
Agreement and Fifth Amendment to Credit Agreement dated |
About TETRA Technologies, Inc. (NASDAQ:TTTNW)