Service & Supply | Finance & Investing | Debt | Oilfield Services | Capital Markets

Canyon Services Group Funding Ops with New Credit

Email    |    Print    |    Bookmark

You Need to login first

   |    Thursday,July 23,2015

Canyon Services Group Inc. has announced that, effective July 21, 2015, it has increased its existing bank lines by entering into a new extendible revolving operating credit facility with a syndicate of financial institutions led by Canadian Imperial Bank of Commerce as sole lead arranger and administrative agent.

The principal amount of the Facility totals CDN $100 million with an accordion feature that allows for the expansion of the Facility by up to an aggregate maximum principal amount of CDN $50 million. The accordion feature is available upon request by Canyon, subject to review and approval by the Lenders. The Facility has a term of three years, extendible annually, and bears interest at variable rates depending on certain financial ratios and metrics.

Under the Facility Canyon will not be subject to a debt to EBITDA covenant from July 21, 2015 through June 30, 2016. The financial covenants in place, under the Facility, are comprised of a debt to capitalization ratio which shall not exceed 0.25 to 1.00 and a debt service coverage ratio which shall not be less than 1.25 to 1.00, each measured at the end of each fiscal quarter. The debt to capitalization ratio will be replaced by a debt to EBITDA ratio beginning with the fiscal quarter ending September 30, 2016. Once enacted, the debt to EBITDA ratio shall not exceed 3.50 to 1.00 at any time during the fiscal quarter ended September 30, 2016 and 3.00 to 1.00 thereafter.

Brad Fedora the President and CEO of Canyon stated: "We believe that our history of financial prudence has allowed us to enter into this new credit facility on terms which will provide Canyon with the stability and flexibility necessary to operate through these uncertain economic times."