Key Energy to redeem all $275 million 8 3/8% notes, repaid $150 million 6 3/8% notes

By Caroline Salls

Pittsburgh, Oct. 6 - Key Energy Services, Inc. will redeem all $275 million of its 8 3/8% senior notes due 2008 on Nov. 8 at a redemption price of 104.188% of the principal amount outstanding plus interest accrued to the redemption date, according to a company news release.

The company also said it paid the outstanding principal and interest on its $150 million 6 3/8% senior notes due 2013 on Wednesday using $150 million in borrowings from its $400 million seven-year delayed-draw term loan B.

The retirement of the 8 3/8% notes will be funded by borrowing $250 million from the company's $400 million seven-year delayed-draw term loan B and cash on hand.

The 6 3/8% notes were repaid following acceleration by the holders of $51.6 million or 34% of the outstanding notes and demand for payment by the indenture trustee Cede & Co. because of Key Energy's failure to file its 10-K annual report for the year ended Dec. 31, 2003 on time.

In connection with the redemption, the company will record a $13.3 million pre-tax charge in the December quarter because of the redemption premium, the acceleration of the existing unamortized premium and the acceleration of unamortized debt issuance costs, the release said.

In connection with the repayment of the 6 3/8% notes, the company will record a $2.1 million pre-tax charge in the December quarter because of the acceleration of unamortized debt issuance costs.

Following the retirement of the 8 3/8% notes and repayment of the 6 3/8% notes, the company will have $400 million outstanding under its term loan B facility, no borrowings outstanding under its $65 million revolving credit facility and $82.1 million in letters of credit issued under its $82.25 million synthetic letter-of-credit facility.

In July, Key Energy obtained a $547.25 million senior credit facility including the $400 million seven-year delayed-draw term loan B.

Key Energy is a Houston-based oil well service 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.