Boart reduces credit facility

Drilling services provider says amendments' effectiveness depends on debt offer.

Boart Longyear (BLY) has reduced the size of its revolving credit facility as part of a series of amendments to its lending agreements.

In a statement to the Australian Securities Exchange, the drilling services provider said it has reduced the facility from $US450 million ($478.9 million) to $US140 million.

The group said up to $US120 million of the credit facility will be available for borrowing in the form of revolving loans, while the rest will be available for the issuance of letters of credit.

Boart Longyear's amendments to its credit facility terms will remove the existing maximum gross debt to EBITDA leverage ratio agreement and adjust the minimum interest coverage agreement to a ratio of 1.55 to 1.0.

It adds provisions requiring maintenance of at least $US30 million in liquidity and a minimum asset coverage ratio of 1.25 to 1.0.

The effectiveness of the amendments is subject to completion of the group's $US300 million debt offering and the use of that to pay down loans outstanding under the revolving credit facility, Boart Longyear said.