CH2M temporarily increases maximum leverage ratio, makes other changes

By Angela McDaniels

Tacoma, Wash., Oct. 2 – CH2M HILL Cos., Ltd. amended its $1.1 billion revolving credit facility on Sept. 26 to provide financial and operational flexibility, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the company amended the revolver to

• Change the definition of consolidated adjusted EBITDA to allow add back of up to $120 million of cash restructuring charges, including up to $80 million of cash restructuring charges in 2014 and up to $40 million 2015 (with a rollover of unused 2014 amounts to 2015);

• Temporarily increase the maximum consolidated leverage ratio to 3.25 times from 3 times through the end of 2015;

• Limit the amount CH2M HILL may spend to repurchase its common stock in connection with its employee stock ownership program to $45 million in the third and fourth quarters of 2014 and an additional $45 million in 2015 (with a rollover of unused 2014 amounts to 2015), and both the repurchase of common stock in the internal market and legally required repurchases of common stock held in benefit plan accounts are applied toward these limits (although legally required repurchases of common stock held in benefit plan accounts are allowed in excess of these limits);

• Permit other repurchases of common stock and preferred stock and payment of common stock dividends up to $100 million per fiscal year, subject to a pro forma 3 times leverage threshold through 2015 and 2.75 times thereafter;

• Permit payment of dividends on preferred stock without regard to the foregoing $100 million per fiscal year limitation subject to pro forma financial covenant compliance;

• Permit restricted payments, including common or preferred stock repurchases and redemptions, with proceeds from the sale of new equity interests, subject to pro forma financial covenant compliance; and

• Allow up to 50% of the proceeds from asset sales to be used to repurchase common or preferred stock, subject to pro forma financial covenant compliance.

The revolver includes a $750 million sublimit for standby letters of credit, a $300 million sublimit for multicurrency borrowings and a $50 million sublimit for swingline loans.

The revolver is available to CH2M HILL and its subsidiaries to refinance certain debt and for general corporate purposes.

Wells Fargo Bank, NA is the administrative agent and swingline lender.

The engineering and construction company is based in Englewood, Colo.

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