Nabors Industries Ltd. has announced the amendment and restatement of its secured credit facility, closing a new $475 million facility on June 17, 2024. The new facility consists of $350 million for revolving credit and $125 million for letters of credit, maturing on June 17, 2029. Notably, this replaces the prior $350 million secured credit facility that would have matured on January 21, 2026.
Key changes in the amended and restated credit facility from the prior facility include an increase in the letter of credit facility from $100 million to $125 million and the introduction of a $200 million uncommitted accordion feature, compared to a $100 million accordion for the prior facility.
The existing basket in the prior facility for additional indebtedness remains unchanged, with up to $150 million for additional indebtedness in the form of term loans and letter of credits, secured by liens. Additionally, the grower basket for term loans of up to $100 million also remains unchanged.
The amended and restated credit facility requires Nabors to maintain an interest coverage ratio of 2.75:1.00 and a minimum guarantor value of 90%. It is guaranteed by Nabors and certain of its subsidiaries.
The initial borrowing margin under the new credit facility will be approximately 2.75%, with the borrowing rate varying over time and subject to adjustments based on changes to Nabors' credit ratings.
William Restrepo, Chief Financial Officer of Nabors, highlighted that the amendment to the credit facility improves the company's overall liquidity profile, providing more flexibility to address working capital needs and support growth in international markets.
The participating institutions in the credit facility include Citibank, N.A., Wells Fargo Bank, N.A., Goldman Sachs Bank USA, HSBC Bank USA, N.A., and Morgan Stanley Senior Funding, Inc.
The company plans to continue addressing debt maturities prudently and in advance of their expiration, with the expectation that operating results will strengthen, supporting cash flow targets as they progress through 2024.
For further details regarding the credit facility, a Current Report on Form 8-K has been filed with the Securities and Exchange Commission.
Nabors Industries, a leading provider of advanced technology for the energy industry, operates in more than 20 countries and aims to innovate the future of energy and enable the transition to a lower-carbon world.
Investor contacts for further information regarding Nabors include William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, and Kara Peak, Director of Corporate Development & Investor Relations. The market has reacted to these announcements by moving the company's shares 1.5% to a price of $61.79. Check out the company's full 8-K submission here.
