C&J Energy lifts secured revolver to $400 million to fund acquisition

By Marisa Wong

Madison, Wis., June 7 - C&J Energy Services, Inc. entered into an amendment to its existing senior secured revolving credit agreement dated April 19, 2011 with Bank of America, NA as administrative agent.

The amendment lifts the company's borrowing capacity under the revolving facility to $400 million from $200 million and allows the company to increase commitments by $100 million, up from $75 million.

The amendment was completed on Tuesday, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The company drew $220 million under the revolver to fund its acquisition of Casedhole Holdings, Inc., according to a Thursday news release. The remainder of the $272.5 million cash purchase price was paid with cash on hand.

The revolver's letter-of-credit sublimit was left unchanged at $200 million, but the sublimit for swingline loans was increased to $25 million from $15 million.

The amendment makes some changes to the facility's covenants, including the restriction on the company and its subsidiaries' ability to conduct asset sales, incur additional debt, grant liens, issue guarantees, make investments, loans or advances and enter into certain transactions with affiliates.

Additionally, the amendment alters the restriction on capital expenditures to allow the company to make an unlimited amount of capital expenditures so long as the consolidated leverage ratio is less than 2 to 1, liquidity is greater than $40 million and no default exists.

Also, in the event that these conditions are not met, the company will be permitted to make capital expenditures of up to $200 million in any fiscal year, provided that up to $50 million of such amount may be rolled over to the following year and up to $50 million may be pulled forward from the next year.

The maturity date of the facility is still April 19, 2016. Pricing is unchanged at Libor plus 225 basis points to 300 bps, depending on leverage.

C&J Energy is a Houston-based provider of hydraulic fracturing, coiled tubing and pressure pumping services.

Casedhole is a Houston-based provider of cased-hole wireline and other services for energy producers.

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