Willbros Group, a contractor for the oil, gas and power industries, has increased a $125 million bank facility with Credit Lyonnais to $150 million for an anticipated busy period. Since September, Willbros has seen an increase from $1.2 billion to over $5 billion in projects and prospects of work, said Michael Collier, Willbros' investor relations manager.
The new three-year facility replaces the old line and will be used for stand-by and commercial letters of credit. Since projects are completed on a long-term basis, a rolling-forward credit facility was needed to match the prospective work load, Collier said. The old facility was expiring in June 2005 and Willbros wanted to have the money ready, he added. "Being funded by third parties, it is very important to guarantee the prepayment of our projects. The new credit facility allows us to post letters of credit to our clients and be able to meet our cyclical cash requirements," he explained. He could not provide the names of the other banks in the syndicate.
"Continuing a relationship with Credit Lyonnais was desirable given the nature of Willbros' business," Collier declared. Willbros needed an international bank with offices around the world that is active in the energy sector, he explained. "Given its knowledge of the sector and international focus Credit Lyonnais was a very good fit," he noted. "We want banks that are partners of our business and that can give us a competitive advantage. If those banks can call our attention at points we don't see, then it's a two-way street." Pricing is the base rate plus 3/4-2% or the Eurodollar rate plus 13/4-3%. The commitment fee on the unused portion is 3/8-5/8%.