Infrastructure and Energy Alternatives lenders reset leverage covenant

By Angela McDaniels

Tacoma, Wash., May 16 – Infrastructure and Energy Alternatives, Inc. reached an agreement Wednesday with a majority in interest of its lenders to amend its senior credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The required lenders agreed to reset the first-lien net leverage ratio financial covenant level for the March 31 fiscal quarter end to 4.75 to 1.00.

The interest rate on term loan borrowings for consenting lenders will be increased by 200 basis points, subject to reduction to its previous level upon a reduction in the company’s first-lien leverage.

The company has also agreed to provide the lenders with several additional protections, including further limitations on existing negative covenants and limits on the company’s ability to incur additional debt and make payments on its equity.

The amendment adds a covenant that requires the company to enter into an amendment and restatement agreement with the lenders by May 25. The failure to do so will result in the amendment to the financial covenant becoming null and void, cause the company to be in technical default of the first-lien net leverage ratio as of March 31 and result in all amounts outstanding under the credit agreement to be currently payable.

The amendment and restatement agreement will become effective upon, among other conditions, the company obtaining equity financing with at least $50 million of gross proceeds and the company paying to each lender that consents to the amendment and restatement agreement a 0.5% fee.

The company expects the amendment and restatement agreement to become effective on May 20.

A fund managed by Ares Management Corp. and funds managed by Oaktree Capital Management, LP have agreed to purchase $50 million of newly created series B preferred stock from the company. The proceeds will be used for working capital and to reduce outstanding borrowings under the revolving senior credit facility.

Infrastructure and Energy Alternatives is an infrastructure construction company based in Indianapolis.

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