New York, Dec. 17 - Hanover Compressor Co.'s new revolving credit facility carries an interest rate of 100 to 175 basis points over Libor, depending on the company's leverage ratio, and a commitment fee of 25 to 37.5 basis points a year, again depending on the company's leverage ratio.
As previously announced, the amendment increased the size of the facility to $350 million from $200 million and extended the term by three years to Nov. 30, 2004.
The amendment also allows the Houston, Texas provider of gas compression services to issue a new series of $150 million of convertibles notes.
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.
Depending on the company's leverage ratio, pricing is set according to a grid as follows (the interest rate can be either a margin over Libor or a margin over the base rate, at Hanover Compressor's option):
| Leverage ratio | Margin over Libor | Margin over base rate | Commitment fee
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| Greater than 3.0:1.0 | 175 basis points | 75 basis points | 37.5 basis points
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| Greater than 2.0:1.0 | 150 basis points | 50 basis points | 30 basis points
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| Greater than 1.0:1.0 | 125 basis points | 50 basis points | 30 basis points
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| 1.0:1.0 or less | 100 basis points | Flat | 25 basis points
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| Covenants on the facility require Hanover Compressor to keep consolidated debt (excluding 70% of the company's TIDES convertibles) to consolidated capitalization at 0.65:1.00 or lower and keep its current ratio at 1.0:1.0 or higher, both at the end of any quarter. At the end of any four consecutive quarters, consolidated senior debt to consolidated adjusted EBITDA (earnings before interest, taxation, depreciation and amortization) must be 4.0:1.0 or lower, consolidated senior debt to consolidated EBITDA must be 3.0:1.0 or lower, consolidated debt (excluding 70% of the TIDES) to consolidated adjusted EBITDA must be 4.5:1.0 or lower and interest coverage must be 2.5:1.0 or higher (excluding accrued interest on the TIDES).
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| The new convertibles which Hanover Compressor is allowed to issue can be up to $150 million in size and must not mature before 2008. Unless approved by the lenders, the terms must be at least as favorable to the company and its bank lenders as its existing $192 million 4.75% convertible senior notes due 2008.
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| 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.
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