Fluor enters $1.7 billion five-year revolver to replace 2010 facility

By Marisa Wong

Madison, Wis., June 3 - Fluor Corp. entered into a $1.7 billion revolving loan and letter-of-credit facility agreement on May 28 with BNP Paribas as administrative agent and an issuing lender, Bank of America, NA as syndication agent and Citibank, NA and Bank of Tokyo-Mitsubishi UFJ, Ltd. as co-documentation agents, according to an 8-K filing with the Securities and Exchange Commission.

On the closing date, Fluor terminated its existing $1.2 billion revolving performance letter-of-credit facility agreement dated Dec. 14, 2010. All outstanding letters of credit under the prior facility were assigned or transferred to the new facility.

The new credit facility provides support for the issuance of up to $1.7 billion of performance standby letters of credit and includes a $750 million sublimit for cash drawings and the issuance of financial letters of credit.

The credit facility also has an accordion feature that allows the facility to be increased in increments of at least $25 million or any whole multiple of $10 million in excess of that, up to an additional $500 million.

The facility matures on May 27, 2019.

Interest is equal to Libor plus an applicable margin based on the company's ratings. The exact margins were not disclosed in the 8-K filing.

The company must also pay a letter-of-credit fee when letters of credit are issued and a commitment fee for unused amounts. The fees are based on the company's ratings.

In addition, the credit facility requires that the company maintain a maximum ratio of consolidated debt to consolidated tangible net worth of 1 to 1.

The facility contains restrictive covenants including, among other things, capping at $750 million the aggregate amount of debt for the company's subsidiaries.

In connection with the new facility, the company amended its existing $1.8 billion revolving loan and letter-of-credit facility agreement dated Nov. 9, 2012 to extend the maturity date to May 27, 2019 from Nov. 8, 2017.

The amendment also increases the cap on the total amount of debt for Fluor subsidiaries to $750 million from $600 million and updates other provisions to match the terms of the new credit agreement.

The engineering and construction firm is based in Irving, Texas.

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