Forum Energy lines up $300 million of revolver commitments due 2021

By Susanna Moon

Chicago, Nov. 2 – Forum Energy Technologies, Inc. secured $300 million of commitments under a senior-secured asset-based revolving lending facility due July 2021.

Forum amended its credit agreement on Monday with Wells Fargo Bank, NA, JPMorgan Chase Bank, NA, Bank of America, NA and Citibank, NA as joint lead arrangers and bookrunners and Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans is initially Libor plus 225 basis points, with a spread of Libor plus 175 bps to Libor plus 225 bps, based on average excess availability.

If leverage falls to 4 times or less, the spread will drop by 25 bps to Libor plus 150 bps to Libor plus 200 bps.

The credit agreement has a sublimit of up to $25 million for the issue of letters of credit, of which up to $30 million is available to some Canadian subsidiaries for loans in U.S. or Canadian dollars with a sublimit of up to $3 million for the issue of letters of credit for the account of Canadian subsidiaries.

The company may add commitments for another $100 million.

If the company’s notes due October 2021 are refinanced with debt maturing on or after Jan. 31, 2023, the facility will automatically be extended to October 2022.

Under the loan terms, if excess availability under the facility falls below the greater of 10% of the line cap and $20 million, the company will be required to maintain a fixed charge coverage ratio of at least 1:1 at the end of each fiscal quarter until excess availability exceeds those thresholds for at least 60 consecutive days.

Forum Energy Technologies is a Houston-based manufacturer of oilfield products and related after-market technical services in the oil and natural gas industry.

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