Item 1.01. Entry into a Material Definitive Agreement.
On September 30, 2021, Helix Energy Solutions Group, Inc., a Minnesota corporation (the “Company”), entered into an asset-based credit agreement (the “ABL Facility”) among the Company, Bank of America, N.A., as administrative agent and the lenders party thereto. The ABL Facility provides for an $80 million asset-based revolving credit facility, which matures on September 30, 2026, with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $50 million. As of September 30, 2021, the commercial bank lending syndicate is comprised of Bank of America, N.A., Wells Fargo Bank, National Association, and Zions Bancorporation.
The ABL Facility provides funding based on a borrowing base calculation that includes eligible U.S. and U.K. customer accounts receivable and cash, and provides for a $10 million sub-limit for the issuance of letters of credit. Borrowings under the ABL Facility bear interest at a rate equal to LIBOR or SONIA (subject to a floor rate of 0%) plus a margin of 1.50% to 2.00%, or at a base rate plus a margin of 0.50% to 1.00%, in each case based on average borrowing availability. The Company must also pay a commitment fee of 0.375% to 0.50% per annum based on unused commitments under the ABL Facility. Outstanding obligations under the ABL Facility are secured by a pledge of all of the Company’s U.S. accounts receivable and related assets and substantially all of the Company’s U.K. assets, excluding the Q7000 vessel and related accounts receivable.
The ABL Facility places certain limitations on the Company’s ability to incur additional indebtedness, grant liens on assets, pay dividends and make distributions on equity interests, dispose of assets, make investments, repay certain indebtedness, engage in mergers, and other matters, in each case subject to certain exceptions. The ABL Facility contains customary default provisions which, if triggered, could result in acceleration of all amounts then outstanding. The ABL Facility also requires the Company to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 in certain circumstances and to maintain a pro forma minimum excess availability of $16 million for the 91 days prior to the maturity of each of the Company’s outstanding Convertible Senior Notes.
The above description of the material terms and conditions of the ABL Facility is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the ABL Facility, which is filed as Exhibit 4.1 hereto.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information described above under “Item 1.01. Entry into a Material Definitive Agreement” is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On September 30, 2021, the Company issued a press release regarding the ABL Facility, which press release is attached as Exhibit 99.1 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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| | Loan, Guaranty and Security Agreement, dated as of September 30, 2021, among Helix Energy Solutions Group, Inc., Helix Well Ops Inc., Helix Robotics Solutions, Inc., Deepwater Abandonment Alternatives, Inc., Helix Well Ops (U.K.) Limited and Helix Robotics Solutions Limited as Borrowers, the Lenders from time to time party thereto, and Bank of America, N.A. as Agent. |
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