Parker Drilling Gets Its Credit Facility Amended

Parker Drilling Company

disclosed that it agreed to the terms with its lenders on an amendment to its 2015 Secured Credit Agreement. According to the company, the terms of the Amendment provided covenant relief and flexibility to help navigate the prolonged industry downturn. Parker Drilling said that it has no borrowings outstanding under its crediit facility and as of March 31, 2016, it had $12.8 million of outstanding letters of credit. The company's Chairman, President and CEO, Gary Rich, commented, "This amendment contains significant covenant relief that should provide the Company with improved financial flexibility during this current market downturn. Although our borrowing capacity was reduced to $100 million, we believe the Company's liquidity remains strong with a cash position on March 31, 2016 of $108 million and an undrawn credit facility." He continued to say, "We expect to fully fund our 2016 capital program and interest obligations through cash flow from operations and cash on hand without accessing the credit facility. The amendment further strengthens our belief that we are well positioned to navigate our way through the current challenging market environment." Parker Drilling pointed out some of the key elements to the Amendment. That included elimination of its Leverage Ratio covenant until the fourth quarter of 2018 when the covenant reverts to 4.25x, and remains at 4.25x thereafter. The second key point was also the removal of its Interest Coverage Ratio covenant until the fourth quarter of 2017 when the covenant reverts to 1.00x and increases 0.25x each subsequent quarter until reaching 2.00x in the fourth quarter of 2018, and remains 2.00x thereafter. The company said that the third key point was in respect of an immediate increase in its Senior Secured Leverage Ratio covenant to 2.80x from 1.50x until it decreases to 2.20x in the second quarter of 2017, 1.75x in the third quarter of 2017, and 1.50x in the fourth quarter of 2017 and thereafter. The fourth one related to the total lender commitments reduction to $100 million from $200 million. On Wednesday, the stock traded 1.36 percent higher.