ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 25, 2016, Atwood Oceanics, Inc., as guarantor (the “Company”), and Atwood Offshore Worldwide Limited, as borrower (the
“Borrower”), entered into a Fourth Amendment to Amended and Restated Credit Agreement (the “Amendment”) with the lenders party thereto and Nordea Bank AB, London Branch, as administrative agent, which amends the Amended and
Restated Credit Agreement, dated as of April 10, 2014 (the “Credit Agreement”). The Amendment became effective on March 28, 2016. The Amendment, among other things, (i) removes the maximum leverage ratio and maximum secured
leverage ratio financial covenants, (ii) amends the minimum interest expense coverage ratio such that it is not tested until the quarter ending September 30, 2018, and decreases the minimum ratio required thereby to 1.15:1.00,
(iii) adds a minimum liquidity financial covenant of $150 million, (iv) revises the restricted payments covenant to prohibit the Company from paying dividends, (v) reduces the total commitments under the Credit Agreement by $152
million and (vi) permits the incurrence of up to $400 million of second lien debt, subject to the parameters set forth therein. After giving effect to the Amendment, commitments under the Credit Agreement are $1.395 billion through May 2018 and
$1.1205 billion through May 2019.
As a result of the Amendment, borrowings under the Credit Agreement will bear interest at the
Eurodollar rate plus a margin ranging from 2.50% to 3.25% and the commitment fee on the unused portion of the underlying commitment ranges from 1.00% to 1.30% per annum, in each case based on the Company’s corporate credit ratings.
In connection with the Amendment, the Company mortgaged as additional collateral under the Credit Agreement the
Atwood Achiever
, the
Atwood Advantage
and the
Atwood Orca
, as well as pledged the equity interests in the subsidiaries of the Company that own, directly or indirectly, the
Atwood Achiever
, the
Atwood Advantage
and the
Atwood Orca
.
Additionally, the
Atwood Eagle
and
Atwood Falcon
, along with the pledged equity interests in certain subsidiaries of the Company that, directly or indirectly, own the
Atwood Eagle
and
Atwood Falcon
, were removed as
collateral under the Credit Agreement.
For a description of the other terms of the Credit Agreement, please see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities—Revolving Credit Facility” in the Company’s Annual Report on Form 10-K for the year ended
September 30, 2015, which description is incorporated herein by reference.
This description of the Amendment is a summary only and
is qualified in its entirety by the full and complete terms of the Amendment, which is attached as Exhibit 10.1 hereto.