Layne Christensen Company
) recently announced its agreement for a $135 million senior
secured revolving credit facility - the ABL Facility. The
company's assets will back the five-year facility.
Layne Christian is a water management; construction and
drilling company catering to the requirements of the water,
mineral and energy industries across the globe. The company had
cash and cash equivalents of nearly $29 million as on Oct 31,
2013 whereas its long-term debt stood at $102.7 million.
Major banks including PNC Bank National Association, a unit of
The PNC Financial Services Group, Inc.
), the banking unit of
Wells Fargo & Company
) and Jefferies Finance LLC will contribute to the ABL facility.
The interest rate on the facility will be based on London
Interbank Offered Rate (LIBOR) and a premium of 2.75%-3.25% based
on quarterly performance. Layne Christensen has also included the
accordion feature in the agreement, which entitles it to expand
this credit facility to $200 million, if required.
These banks will play a significant role that range from being
an administrative agent, lead arranger, book running manager,
syndication agent and lender to being the co-collateral agent as
The company earlier had a $150 million credit facility, which
was done away with as the ABL facility agreement materialized.
Layne Christensen will be using about $31 million from the ABL
facility to cash collateralize credit from the previous facility.
The company intends to transfer all of the earlier credit to the
This new credit facility has lower borrowing costs in
comparison to the earlier one, which gives Layne Christensen
greater flexibility while meeting its capital requirements
efficiently. This is likely to drive the company's growth, going
Layne Christensen currently has a Zacks Rank #3 (Hold).
Investors interested in this sector could consider
AECOM Technology Corporation
) with a Zacks Rank #2 (Buy).
AECOM TECH CORP (ACM): Free Stock Analysis
LAYNE CHRISTENS (LAYN): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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