Rowan enters into new five-year loan

Houston-based offshore driller Rowan Companies has extended its liquidity runway by entering into a new unsecured five-year credit facility with its banking group. 

According to its statement on Tuesday, Rowan has amended the agreement governing its existing revolving credit facility and entered into a new agreement providing for an additional senior unsecured revolving credit facility.

The facilities will provide for initial total borrowing capacity of approximately $1.266 billion, further enhancing Rowan’s financial flexibility, the company explained.

The new five-year facility will provide borrowing capacity of $955 million. Rowan will continue to have access to its existing credit facility, which has been amended to provide for availability of approximately $311 million, with step-downs to occur over the next two years.

The company added that maturity of the existing credit facility is unchanged at January 2021, while the new credit facility will mature in May 2023. The new facility includes additional guarantees from certain Rowan entities and includes certain additional restrictions on Rowan and its subsidiaries.

Rowan’s Executive Vice President and Chief Financial Officer, Stephen Butz, commented, “We are grateful to our banking group for the confidence they have shown in Rowan and for their strong support throughout this process.

“We remain committed to maintaining an attractive credit profile and a solid balance sheet and are pleased with these agreements, which will further enhance the company’s already strong liquidity position providing additional liquidity on an unsecured basis into mid-2023.”

Earlier this month, Rowan posted a net loss of $112.3 million for the first quarter of 2018 compared to net income of $10.3 million in the first quarter of 2017.

The company’s revenues for the first quarter of this year totaled $211.2 million compared to $374.3 million in the same period of 2017.

The company’s long-term debt at the end of March 2018 was $2.5 billion.