Seventy Seven subsidiary obtains $100 million junior-lien term loan

By Toni Weeks

San Luis Obispo, Calif., May 14 – Seventy Seven Energy Inc. wholly owned subsidiary Seventy Seven Operating LLC obtained an incremental $100 million junior-lien financing under its term loan facility with BlueMeridian Capital LLC on May 13, according to a press release. The full $100 million amount was drawn on that same date.

To fund the incremental term loan, Seventy Seven Energy amended its term loan credit agreement with Wells Fargo Bank, NA as administrative agent to increase permitted borrowings to $500 million from $400 million, effective May 13, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings under the incremental term loan bear interest at Libor plus 900 basis points.

Proceeds will be used for general corporate purposes.

Seventy Seven Operating may prepay all or a proportion of the borrowings at any time, and they may be subject to mandatory prepayments with the net cash proceeds of issuances of debt, asset sales and other dispositions and condemnation events as well as with excess cash flow in any calendar year in which Seventy Seven Operating’s leverage ratio exceeds 3.25 to 1.00.

Any prepayments, other than mandatory leverage ratio prepayments, if made on or before 42 months after closing, are subject to a prepayment premium equal to (i) a make-whole amount, if made on or prior to 18 months after closing, (ii) 5% of the principal amount, if made between 18 and 30 months after closing, inclusive, or (iii) 3% of the principal amount, if made after 30 months but before 42 months after closing.

The other terms of the incremental term loans are substantially identical to the terms applicable to Seventy Seven’s pre-existing term loans under the term loan credit agreement.

Oklahoma City-based Seventy Seven is an oilfield services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.