W&T Offshore gets $1.2 billion amended, restated five-year revolver

By Angela McDaniels

Tacoma, Wash., Nov. 13 - W&T Offshore, Inc. entered into an amended and restated credit agreement on Friday that provides for a $1.2 billion revolving credit facility due Nov. 8, 2018, according to an 8-K filing with the Securities and Exchange Commission.

There were $203 million of borrowings outstanding and about $100,000 of letters of credit immediately prior to the effectiveness of the credit agreement.

TD Securities (USA) LLC and Wells Fargo Securities LLC are the bookrunners. Toronto Dominion (Texas) LLC is the administrative agent. Wells Fargo Bank, NA is the syndication agent. Natixis, Bank of Nova Scotia and Fifth Third Bank are the documentation agents.

The interest rate is Libor plus 175 basis points to 275 bps. The commitment fee is 37.5 bps to 50 bps.

Borrowings under the revolver are secured by the company's oil and natural gas properties and are guaranteed by some of the company's wholly owned subsidiaries.

Availability under the revolver is subject to a semiannual redetermination of the company's borrowing base, and the company and the lenders may each request one additional redetermination per year.

The initial borrowing base is $800 million. The sublimit for letters of credit is $300 million.

The credit agreement contains covenants that limit, among other things, the company's ability to pay cash dividends in excess of $60 million per year and repurchase common stock or outstanding senior notes in excess of $100 million in the aggregate, provided that the limitation will not apply to the repurchase of senior notes in a principal amount equal to the principal amount of any new issuance of notes.

The company is allow to issue additional unsecured debt above its current level of $900 million as long as no event of default occurs, the company is in compliance with its financial covenants after giving pro forma effect to the additional debt and that additional debts matures after the maturity date of the credit agreement and is not subject to restrictive covenants materially more onerous than those in the credit agreement.

If the company issues additional unsecured debt in excess of the current $900 million principal amount, the borrowing base then in effect will be reduced by $0.25 for each dollar of such excess until the borrowing base is redetermined by the company's lenders.

The credit agreement also contains financial tests including a maximum consolidated leverage ratio of 3.5 to 1.0 and a minimum current ratio of 1.0 to 1.0.

W&T Offshore is a Houston-based oil and natural gas producer.

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