Pioneer Drilling amends revolver, revising maturity, size and pricing

By Sara Rosenberg

New York, Oct. 6 - Pioneer Drilling Co. amended its revolving credit facility, shortening the maturity date to Aug. 31, 2012 from Feb. 28, 2013, reducing the size to $325 million from $400 million and revising pricing, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The aggregate amount of commitments under the facility will be further reduced concurrently with the application of certain mandatory prepayments; however, there is a minimum size of $200 million.

Pricing on the facility can now range from Libor plus 350 basis points to 600 bps and the commitment fee can range from 50 bps to 75 bps, based on total leverage.

In addition, the amendment added a maximum senior leverage ratio covenant, reset the existing financial covenants and, starting with the year ending Dec. 31, requires prepayments from 50% of excess cash flow if the senior leverage ratio is greater than 2.50 to 1.00.

Also, the amendment provides that if the senior leverage ratio is greater than 2.25 to 1.00 and the asset coverage ratio is less than 1.00 to 1.00, borrowings are limited based on a borrowing base consisting of a percentage of receivables, equipment and other fixed assets.

As part of the amendment, Pioneer Global Holdings Inc. and its subsidiaries were included as restricted subsidiaries under the credit agreement subject to compliance with the representations and warranties, affirmative and negative covenants and events of default.

The amendment was completed on Oct. 5, at which time there was $257.5 million outstanding under the facility.

Wells Fargo is the administrative agent on the deal.

Pioneer Drilling is a San Antonio, Texas-based provider of contract land drilling services to independent and major oil and gas operators.

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