HOUSTON, June 1, 2015 /PRNewswire/ -- Key Energy
Services, Inc. (NYSE: KEG) announced today that it has closed a
$100 million asset-based revolving
credit facility ("ABL") due February
2020 and closed and funded a $315
million term loan facility due June
2020 (together, the "Facilities"). The Facilities replace
Key's existing $400 million senior
revolving credit facility.
The Facilities do not have cash flow based financial maintenance
covenants; however, the Facilities require Key to maintain
$100 million in liquidity, including
cash and availability under the ABL. Upon closing, Key had
$270.6 million of liquidity, assuming
the completion of certain post-closing collateral perfection
requirements. The Facilities also require Key to maintain
the ratio of the net orderly liquidation value of its assets
and certain term loan proceeds to term loan borrowings of 1.5x. As
of the date of closing, this ratio was 2.15x. The ABL also includes
a fixed charge coverage ratio of 1.0x, which is tested only if
excess availability under the ABL falls below a specified threshold
or upon the occurrence of certain other events. The term loan was
issued at an OID of 3.0% with an annual rate of LIBOR plus 9.25%
with a 1.00% LIBOR floor. The ABL bears interest at an annual rate
on outstanding borrowings of LIBOR plus 4.5%, with a fee on unused
commitments ranging from 1.00% - 1.25% based on utilization. Key
plans to file copies of the Facilities with the U.S. Securities and
Exchange Commission as exhibits to a Current Report on Form 8-K,
and reference should be made to the Facilities for a complete
description of their terms.
Commenting on the transaction, Dick
Alario, Key's Chairman, President and Chief Executive
Officer stated, "We believe that with the consummation of the
refinancing of Key's existing revolving credit facility, we have
secured sufficient liquidity with a favorable covenant structure to
navigate the current industry downturn and flexibility with respect
to our on-going Foreign Corrupt Practices Act investigation."
Bank of America Merrill Lynch acted as the Sole Lead Arranger of
the term loan facility and Bank of America Merrill Lynch and Wells
Fargo acted as Joint Lead Arrangers on the ABL.
Forward Looking Statements
This press release
contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements as
to matters that are not of historic fact are forward-looking
statements. These forward-looking statements are based on Key's
current expectations, estimates and projections about Key, its
industry, its management's beliefs and certain assumptions made by
management, and include statements regarding the Company's
projected liquidity and the resolution of the FCPA investigation.
No assurance can be given that such expectations, estimates or
projections will prove to have been correct. Whenever possible,
these "forward-looking statements" are identified by words such as
"expects," "believes," "anticipates" and similar phrases.
Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict, including, but not limited to: risks related to
Key's new credit facilities, including that Key may not be able to
comply with the covenants in the new facilities or that the
borrowings available under the ABL, together with cash generated by
operations, will not provide sufficient liquidity for Key; risks
that Key will be unable to achieve its financial, capital
expenditure and operational projections, including quarterly and
annual projections of revenue and/or operating income and risks
that Key's expectations regarding future activity levels, customer
demand, and pricing stability may not materialize (whether for Key
as a whole or for geographic regions and/or business segments
individually); risks that fundamentals in the U.S. oil and gas
markets may not yield anticipated future growth in Key's
businesses, or could further deteriorate or worsen from the
recent market declines, and/or that Key could experience further
unexpected declines in activity and demand for its rig service,
fluid management service, coiled tubing service, and fishing and
rental service businesses; risks relating to Key's ability to
implement technological developments and enhancements; risks
relating to compliance with environmental, health and safety laws
and regulations, as well as actions by governmental and regulatory
authorities; risks relating to compliance with the FCPA and
anti-corruption laws, including risks related to increased costs in
connection with FCPA investigations; risks regarding the timing or
conclusion of the FCPA investigations, including the risk of fines
or penalties imposed by government agencies for violations of the
FCPA; risks affecting Key's international operations, including
risks affecting Key's ability to execute its plans to withdraw from
its international markets outside North
America; risks that Key may be unable to achieve the
benefits expected from acquisition and disposition transactions,
and risks associated with integration of the acquired operations
into Key's operations; risks, in responding to changing or
declining market conditions, that Key may not be able to reduce,
and could even experience increases in, the costs of labor, fuel,
equipment and supplies employed and used in Key's businesses; risks
relating to changes in the demand for or the price of oil and
natural gas; risks that Key may not be able to execute its capital
expenditure program and/or that any such capital expenditure
investments, if made, will not generate adequate returns; and other
risks affecting Key's ability to maintain or improve operations,
including its ability to maintain prices for services under market
pricing pressures, weather risks, and the impact of potential
increases in general and administrative expenses.
Because such statements involve risks and uncertainties, many
of which are outside of Key's control, Key's actual results and
performance may differ materially from the results expressed or
implied by such forward-looking statements. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Other important risk factors that
may affect Key's business, results of operations and financial
position are discussed in its most recently filed Annual Report on
Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current
Reports on Form 8-K and in other Securities and Exchange Commission
filings. Unless otherwise required by law, Key also disclaims any
obligation to update its view of any such risks or uncertainties or
to announce publicly the result of any revisions to the
forward-looking statements made here. However, readers should
review carefully reports and documents that Key files periodically
with the Securities and Exchange Commission.
About Key Energy Services
Key Energy Services is the
largest onshore, rig-based well servicing contractor based on the
number of rigs owned. Key provides a complete range of well
intervention services and has operations in all major onshore oil
and gas producing regions of the continental United States and internationally in
Mexico, Colombia, Ecuador, the Middle
East and Russia.
Contact:
West Gotcher, Investor Relations
713-757-5539
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/key-energy-services-announces-the-completion-of-415-million-in-new-credit-facilities-300092078.html
SOURCE Key Energy Services, Inc.