PGS and/or its subsidiaries has secured commitments for a separate $75 million term loan facility to partly refinance its existing March 2024 Term Loan B maturity.
PGS refinanced earlier this year leaving $138 million of the existing Term Loan B to be repaid in March 2024, which the Company expects to be manageable with available liquidity reserve and cash flow generation. However, to further increase the liquidity headroom and financial robustness, the Company has secured commitments for a separate $75 million term loan facility to partly refinance the existing March 2024 Term Loan B maturity.
Interest rate of the new term loan is in line with the existing Term Loan B (SOFR + 7.0%, compared to LIBOR + 7.0% currently). The new term loan will share the same security as the Company’s $450 million bonds and the existing Term Loan B. Subject to customary conditions, the new term loan will be drawn in Q3 2023 with net proceeds used for debt repayment. The new term loan has the following main terms:
- Original principal amount $75 million
- To be issued at 95% of par value (OID)
- Interest rate of SOFR + 7.00%. Quarterly interest payments
- Quarterly amortization of 6.25% of the original principal amount starting June 30, 2024
- Final maturity December 15, 2026
The new term loan has a prepayment premium if prepaid before June 2024 and can be prepaid at par thereafter. This is aligned with PGS deleveraging strategy and allows early repayment without incurring additional cost.
The financial covenants of the new term loan are aligned with the requirements of the $450 million bonds.
The new $75 million term loan is provided by Sculptor Capital Management and Värde Partners.
'We refinanced earlier this year deliberately leaving $138 million of our Term Loan B to be repaid in March 2024. According to our estimates we can manage this repayment with our liquidity reserve and the cash flow we expect to generate over the next quarters. However, to further increase the liquidity headroom in our financial planning and create financial flexibility I am very pleased that we have secured this commitment. It also shows strong support from two of our anchor creditors,' says President & CEO Rune Olav Pedersen.
Source: PGS
