STEP Energy Services Limited Enhances Financial Stability with New Credit Terms
STEP Energy Services Limited Updates Credit Agreement
STEP Energy Services Ltd. (“STEP”) (TSX: STEP) has recently enhanced its financial framework by amending and extending its credit facility with a group of Canadian banks. This significant development aims to bolster its operational capabilities and financial stability.
Details of the Amended Credit Agreement
The new Fourth Amended and Restated Credit Agreement introduces key features designed to support STEP’s operations and growth. The agreement comprises a total of approximately CAD $200 million for a syndicated facility, a CAD $15 million operating facility, and a USD $15 million operating facility.
Key Financial Terms of the Agreement
This agreement establishes a three-year term, with an anticipated maturity date set for September 27, 2027. It includes specific financial covenants that ensure the company maintains a solid leverage ratio and sufficient liquidity.
Financial Covenants Explained
The financial covenants are critical as they include the following:
- Funded Debt to EBITDA Ratio: This must not exceed 3.00:1.00, calculated quarterly based on a rolling four-quarter basis.
- Interest Coverage Ratio: Required to be at least 3.00:1.00, also evaluated on a quarterly basis.
Who Is Behind STEP's Banking Syndicate?
Leading this banking syndicate is ATB Financial, acting as the Administrative Agent, Co-Lead Arranger, and Co-Bookrunner. Several other reputable institutions, including the Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, Royal Bank of Canada, and Toronto Dominion Bank, are involved in this vital financing arrangement.
Important Financial Considerations
As part of the amendment process, STEP is committed to covering customary fees and expenses at prevailing market rates to the lending syndicate.
Accessing the Credit Agreement Information
For those eager to delve deeper into the terms of the Credit Agreement, detailed information will be available on STEP’s profile on SEDAR+.
About STEP Energy Services Ltd.
STEP Energy Services specializes in energy solutions, offering services like coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing. Their blend of modern technology and a staunch adherence to safety and quality sets them apart in the high-demand sectors where deeper and more complex wells are standard.
Founded in 2011, STEP has evolved into a key player in North America, focusing on delivering superior completion and stimulation services. Notably, their services are concentrated in Canada’s Western Canadian Sedimentary Basin (WCSB) and the U.S. Permian Basin.
Commitment to Core Values
STEP's operations are guided by four core values: Safety, Trust, Execution, and Possibilities. These principles foster an environment where professionals are motivated to deliver exceptional service, maintaining a focus on safety and flawless execution in every task.
Frequently Asked Questions
What is the main objective of the recent credit agreement?
The primary aim is to enhance financial stability and operational capabilities for STEP Energy Services.
Who comprises the banking syndicate for STEP?
The syndicate includes ATB Financial, Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, Royal Bank of Canada, and Toronto Dominion Bank.
What are the key financial covenants established?
The covenants include a Funded Debt to EBITDA Ratio of not more than 3.00:1.00 and an Interest Coverage Ratio of at least 3.00:1.00.
How can one access the details of the Credit Agreement?
Details will be accessible on STEP’s SEDAR+ profile.
What services does STEP Energy Services provide?
STEP offers coiled tubing, fluid and nitrogen pumping, and hydraulic fracturing solutions to energy customers.
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