HOUSTON, April 25, 2018 /PRNewswire/ -- KBR, Inc. ( NYSE: KBR), a global provider of differentiated professional services and technologies to the Government Services and Hydrocarbons sectors, announced today that it completed the debt-only refinancing which was announced earlier this year.
KBR has entered into a new Senior Secured Credit Facility in the amount of $2.15 billion. The components include a $500 million Senior Secured Revolving Line of Credit, a $500 million Performance Letter of Credit Facility, and a $350 million Senior Secured Delayed Draw Term Loan A all maturing in April 2023, and also a $800 million Senior Secured Term Loan B maturing in April 2025.
Proceeds from the facilities will be used to fund recent M&A and project requirements and to permanently finance existing revolver borrowings, and will better position KBR's debt capital structure to enable growth and financial flexibility for the future.
Specifically, KBR will utilize a portion of this financing for the acquisition of Stinger Ghaffarian Technologies, Inc. (SGT) which is a significant step forward in KBR's strategy to expand its high-tech professional services across NASA and other Government Services entities and to secure more stable, long term funding sources. In addition, the Term Loan A facility will be used to fund KBR's loan to the JKC joint venture in order to complete the combined cycle power plant on the Ichthys project.
These facilities extend KBR's maturities, provide attractively priced credit capital to fuel investments for growth, and provide for a ring-fencing for capital required for the Ichthys project to clarify visibility of anticipated outflows and inflows.
"Our successful strategy to build a greater base of recurring, low capital intensity services contracts across our portfolio, coupled with other de-risking actions has provided a more predictable stream of cash flows enabling us to tap into the debt markets at this time," said KBR President and CEO Stuart Bradie.
KBR expects its gross debt to EBITDA leverage ratio to be approximately 3.0x after funding of the new facility, and expects to resume a lowering of this ratio over time as has recently been the case with a combination of profit growth, cash generation, and debt reductions.
Additional details about the refinancing are contained in KBR's recent 8-K which can be found at investors.kbr.com
Bank of America, N.A., BNP Paribas Securities Corp., Citigroup Global Markets Inc., MUFG Bank, Ltd., The Bank of Nova Scotia, SunTrust Robinson Humphrey, Inc., and BBVA Securities Inc. acted as Joint Lead Arrangers.
About KBR, Inc.
KBR is a global provider of differentiated professional services and technologies across the asset and program life cycle within the Government Services and Hydrocarbons sectors. KBR employs approximately 34,000 people worldwide (including our joint ventures), with customers in more than 75 countries, and operations in 40 countries, across three synergistic global businesses:
- Government Services, serving government customers globally, including capabilities that cover the full life-cycle of defense, space, aviation and other government programs and missions from research and development, through systems engineering, test and evaluation, program management, to operations, maintenance, and field logistics
- Technology & Consulting, including proprietary technology focused on the monetization of hydrocarbons (especially natural gas and natural gas liquids) in ethylene and petrochemicals; ammonia, nitric acid and fertilizers; oil refining; gasification; oil and gas consulting; integrity management; naval architecture and proprietary hulls; and downstream consulting
- Engineering & Construction, including onshore oil and gas; LNG (liquefaction and regasification)/GTL; oil refining; petrochemicals; chemicals; fertilizers; differentiated EPC; maintenance services (Brown & Root Industrial Services); offshore oil and gas (shallow-water, deep-water, subsea); floating solutions (FPU, FPSO, FLNG & FSRU) and program management
KBR is proud to work with its customers across the globe to provide technology, value-added services, integrated EPC delivery and long term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.
Forward Looking Statement
The statements in this press release that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: the outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; potential adverse proceedings by such agencies and potential adverse results and consequences from such proceedings; the scope and enforceability of the company's indemnities from its former parent; changes in capital spending by the company's customers; the company's ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company's ability to control its cost under its contracts; claims negotiations and contract disputes with the company's customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements; compliance with laws related to income taxes; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; increased competition for employees; the ability to successfully complete and integrate acquisitions; and operations of joint ventures, including joint ventures that are not controlled by the company.
KBR's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other Securities and Exchange Commission filings discuss some of the important risk factors that KBR has identified that may affect the business, results of operations and financial condition. Except as required by law, KBR undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
SOURCE KBR, Inc.