When Houston-based Oceaneering tapped its existing group of banks for a refreshed credit last month it added a previous lender to the pool Citigroup. Robert Mingoia, treasurer, explained the amendments on the $250 million revolving facility included an increase in the bank group from seven to eight all incumbents with the addition of Citi. The bank was involved in previous deals for the company, but had sold its position at one point and "they expressed an interest to get back in," Mingoia said. He declined to comment on why the bank sold its position.
The company entered into the initial four-year, $250 million deal in January 2004. Wells Fargo, HSBC, Comerica, Den Norske Bank, JPMorgan, The Bank of Tokyo-Mitsubishi and Amegy Bank were all involved in the financing. As part of the amendments, Oceaneering utilized its ability to increase the $250 million revolver to $300 million. "It was a nice round number," Mingoia said of the initial $50 million increase. "But we're more interested in the $450 million number." The revised facility allows the company to hit up the banks for an additional $150 million. The funds will be used for general corporate purposes. Oceaneering is a provider of engineered services and products to the offshore oil and gas industry, as well as the defense and aerospace industries. Its offerings include remotely operated vehicles, mobile offshore production systems and built-to-order specialty hardware and manned diving.
Along with increased borrowing power, Oceaneering extended the maturity four years to 2012 and reduced fees and interest rates. "Our revolver was set to expire in January 2008 and we wanted to renew it," Mingoia said. "The fees to carry it are less the new deal gives us flexibility." The company cut pricing to the LIBOR plus 50 to 125 basis point range based on its debt-to-capitalization ratio and removed the facility fee, which applied to the entire $250 million deal. Mingoia declined to comment on the initial LIBOR spread.