Tetra Technologies cuts revolving loan commitments to $225 million

By Susanna Moon

Chicago, Oct. 6 – Tetra Technologies, Inc. amended credit agreement, extending the maturity until Sept. 30, 2019 and cutting revolving commitments to $225 million, according to an 8-K filing with the Securities and Exchange Commission.

The company amended the credit terms on Sept. 30 with JPMorgan Chase Bank, NA as administrative agent.

The revolving commitments were dropped from $278 million, and the previous facility had been set to expire on Oct. 29, 2015.

Interest on the loans will be Libor plus 150 basis points to 275 bps, based on leverage.

The amendment also revised financial covenants and added provisions to address recent changes in laws, the filing noted.

The facility remains unsecured and guaranteed by some of the company’s material domestic subsidiaries.

The financial covenant requires the company to maintain a leverage ratio of no more than 3.5 times through June 30, 2015, 3.25 times after that through Dec. 31, 2015 3 times after that.

The amount of capital expenditures and acquisitions permitted in any fiscal year was further restricted if the pro forma leverage ratio, after giving effect to any capital expenditure or acquisition, is more than 3 times.

In that event, the aggregate amount of all capital expenditures and acquisitions in any fiscal year may not exceed $150 million and the aggregate amount of all acquisitions may not exceed $30 million in any fiscal year until the subsequent fiscal quarter when the pro forma leverage ratio as of the date of any acquisition would be less than or equal to 3 times.

The definition of consolidated net earnings was modified from excluding all extraordinary and nonrecurring gains and losses from the calculation, to only excluding an amount of extraordinary and nonrecurring gains and losses up to 25% of EBITDA beginning with the four quarter period ended Sept. 30, 2015.

Tetra is a Woodlands, Texas-based oil and gas services and production company.

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