Keane Group, Inc. announced that on May 25, 2018 the Company entered into a new senior secured term loan facility in an initial aggregate principal amount of $350 million to refinance its existing term loan credit facility, of which approximately $282.5 million in aggregate principal amount was then outstanding, and to pay related fees and expenses as well as accrued interest of $4.3 million. After discounts and fees related to the New Term Loan Facility, approximately $50 million of excess proceeds remained to fund general corporate purposes.
The New Term Loan Facility has, at the Company’s election, an interest rate per annum initially equal to either (a) the base rate plus 2.75% or (b) LIBOR (subject to a 1.00% floor) plus 3.75%, compared to the existing term loan credit facility’s interest rate per annum of either (a) the base rate plus 6.25% or (b) LIBOR (subject to a 1.00% floor) plus 7.25%. The New Term Loan Facility has a stated maturity date of May 25, 2025. Assuming an interest rate for the New Term Loan Facility at the initial interest rate specified above, the refinancing is expected to result in annualized cash interest savings of approximately $5.0 million driven by lower interest rates, partially offset by an increased facility size.
“In furtherance of our commitment to maintain a strong balance sheet, we are pleased to enter into this new term loan.” said Greg Powell, President and Chief Financial Officer of Keane. “The new facility provides for greater financial flexibility by extending our maturity profile, securing favorable rates and further improving our liquidity. The new facility, combined with an already attractive financial position and strong cash flow generation, increases our capacity to grow our business and return value to shareholders.”
Barclays, J.P. Morgan and BofA Merrill Lynch acted as the joint lead arrangers and book runners, Citigroup and Morgan Stanley acted as the senior managing agents and The Bank of Nova Scotia and Stifel, Nicolaus & Company acted as co-managers for the New Term Loan Facility. Barclays will serve as the administrative agent for the New Term Loan Facility.