Hanover Compressor can issue $150 million convertibles under new credit facility

New York, Dec. 17 - Hanover Compressor Co. can issue up to $150 million of convertible notes under the terms of its new revolving credit facility.

The document says the notes must not mature before 2008 and, unless approved by the bank lenders, must be on terms at least as favorable to the company and its lenders as its existing $192 million of 4.75% convertible senior notes due 2008, according to documents filed with the Securities and Exchange Commission.

Proceeds from the new convertibles will be used to repay a $150 million note issued by Hanover Compressor to Camco International Inc. on Aug. 31, 2001. Any amount left over will be used to pay costs of issuance, then for general corporate purposes.

The inclusion of a possible convertibles deal is part of a previously announced amendment that increased the size of the Houston, Texas company's revolving facility to $350 million from $200 million and extended the term by three years to Nov. 30, 2004.

Administrative agent, bookrunner and lead arranger for the facility is JP Morgan Chase Bank with The Bank of Nova Scotia Atlanta Agency and First Union National Bank as co-syndication agents and The Royal Bank of Scotland plc and Wells Fargo Bank Texas, NA as co-documentation agents.

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