Savanna Energy Services Corp.
TSX : SVY

Savanna Energy Services Corp.

March 17, 2016 17:05 ET

Savanna Energy Services Corp. Announces Amendments to Its Senior Secured Revolving Credit Facility

CALGARY, ALBERTA--(Marketwired - March 17, 2016) - Savanna Energy Services Corp. ("Savanna" or the "Company") (TSX:SVY), has reached an agreement with its lenders to amend the credit agreement governing its senior secured revolving credit facility. The amendment, among other things, reduces the size of the total facility from $250 million to $150 million and reduces certain financial covenant thresholds to the end of 2017, providing Savanna with increased financial flexibility through the remainder of this year and next. The reduction in the size of the facility will also lower standby costs going forward on the undrawn $100 million, $50 million of which was currently inaccessible due to terms under the Company's trust indenture related to its senior unsecured notes. As of the date of this release, the Company had $95 million drawn on the total senior secured revolving credit facility, leaving substantial availability under the facility. The following details the significant aspects of the amended credit agreement:

  • Total size of the facility reduced from $250 million to $150 million;
  • Total $150 million facility is comprised of a $129 million Canadian syndicated facility, a $6 million Australian facility, and a $15 million Canadian operating facility;
  • Accordion of $50 million retained, however it is unavailable until February 2018;
  • Maturity date unchanged at May 25, 2019, or January 25, 2018 if the Company's senior unsecured notes are not repaid or refinanced on terms acceptable to the lenders by that date;
  • Interest rates unchanged at the Canadian prime rate or U.S. base rate plus 0.5% to 3.75%, or bankers' acceptance, letter of credit, LIBOR or BBSY advances plus a 1.75% to 5.0% stamping fee, with these ranges dependent on certain financial ratios of the Company;
  • Standby fees unchanged ranging from 0.39% to 1.25% per annum on the unused portion of the facility, with this range dependent on certain financial ratios of the Company;
  • Restriction to not allow any dividend payments or share buy-backs to occur until February 2018;
  • Twelve-month trailing Bank EBITDA to interest expense covenant ratio minimum reduces to 2.5:1 in Q4 2016 through to Q4 2017, with the periods before and after remaining unchanged from the current minimum of 3.0:1;
  • Senior debt to twelve-month trailing Bank EBITDA covenant ratio reduces to 2.5:1 from the current maximum of 3.0:1;
  • Total funded debt to twelve-month trailing Bank EBITDA covenant ratio maximums updated as follows:
    • For the quarter ending March 31, 2016 5.25:1 (unchanged)
    • For the quarter ending June 30, 2016 5.00:1 (unchanged)
    • For the quarter ending September 30, 2016 5.00:1 (unchanged)
    • For the quarter ending December 31, 2016 5.50:1
    • For the quarter ending March 31, 2017 5.50:1
    • For the quarter ending June 30, 2017 5.25:1
    • For the quarter ending September 30, 2017 5.25:1
    • For the quarter ending December 31, 2017 4.75:1
    • Thereafter 4.00:1

Readers are cautioned that the ratios described above do not have standardized meanings under IFRS as the computation of these ratios excludes amounts from certain non-guarantor subsidiaries and the limited partnerships partially owned by the Company. Key definitions with respect to these ratios are as follows:

  • Bank EBITDA, for the purpose of calculating the Company's financial debt covenants, is determined as earnings before finance expenses, income taxes, depreciation, amortization, share-based compensation, and certain non-cash income and expenses as defined in the credit agreement and excludes amounts from certain non-guarantor subsidiaries and the limited partnerships partially owned by the Company.

  • Total Funded Debt, for the purpose of calculating the Company's financial debt covenants, is determined as total long-term debt, including the current portions thereof but excluding the limited partnership facilities, plus certain other obligations identified in the credit agreement, including but not limited to, any outstanding amounts under the Company's Canadian operating facility, and any outstanding letters of credit.

  • Senior Debt, for the purpose of calculating the Company's financial debt covenants, is determined as Total Funded Debt less the amount of the Company's senior unsecured notes outstanding.

Contact Information

  • Savanna Energy Services Corp.
    Christopher Strong
    President and Chief Executive Officer

    Savanna Energy Services Corp.
    Dwayne LaMontagne
    Executive Vice President and Chief Financial Officer
    (403) 503-9990
    www.savannaenergy.com