UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2006
InfraSource Services, Inc.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Delaware
|
|
001-32164
|
|
03-0523754 |
|
|
| (State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification No.) |
| |
|
|
100 West Sixth Street, Suite 300
Media, Pennsylvania
|
|
19063 |
|
|
| (Address of principal executive offices)
|
|
(Zip Code) |
(610) 480-8000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On June 30, 2006, InfraSource Incorporated (the “Borrower”), a wholly owned subsidiary of
InfraSource Services, Inc. (the “Company”), and the Company, as guarantor, entered into a Credit
Agreement with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
JPMorgan Chase Bank, N.A., as Syndication Agent, Lasalle Bank National Association and National
City Bank as Co-Documentation Agents, and other lenders party thereto (the “Credit Agreement”).
The Credit Agreement provides for a secured revolving credit facility
of up to $225 million in aggregate commitments. The commitments under the Credit Agreement may be used for revolving credit
borrowings, swing loans, not to exceed $10 million, and the issuance of standby letters of credit,
not to exceed $100 million. The Credit Agreement replaces the Company’s previous secured credit
facility, which provided an $85 million revolving credit commitment and $84 million in term loan
commitments.
The
Company’s borrowing availability under the new Credit Agreement is currently $116 million,
compared to $51 million under its previous credit facility. The Borrower will have the right to
seek additional commitments to increase the aggregate commitments up to $350
million.
Under the Credit Agreement, committed loans bear interest at either the Eurodollar Rate
(British Bankers Association LIBOR Rate), or a Base Rate (equal to the higher of the Federal Funds
Rate plus 1/2 of 1% or the Bank of America prime rate) plus, in each case, an applicable margin of
1-2% for Eurodollar borrowings and 0-1% for prime based borrowings, based on the Company’s
consolidated leverage ratio, which represents the ratio of Consolidated Funded Indebtedness to
Consolidated Adjusted EBITDA, as defined in the Credit Agreement. The
Borrower is subject to a
commitment fee of between .175 — .35%, and letter of credit fees between 1-2% based on the
Company’s Consolidated Leverage Ratio. These interest charges and fees represent lower costs as
compared to those under the prior credit facility. The Borrower can prepay all or a portion of any
committed loans from time to time during the term of the Credit Agreement and reborrow up to the
aggregate commitments. The maturity date of the Credit Agreement is June 30, 2012.
The Credit Agreement contains certain restrictive covenants, including financial covenants to
maintain the Company’s consolidated interest coverage ratio not
less than 2.00:1.00 in each period of four trailing fiscal
quarters; consolidated leverage ratio not greater than 3:25:1.00 in
any four quarters prior to the
incurrence of subordinated debt in an amount equal to or greater than $25 million, and 4.00:1.00
for any four quarters after such incurrence; and consolidated senior leverage ratio greater than
2.50:1.00 in any four quarters after incurring subordinated debt or senior unsecured debt equal to or
greater than $25 million. There are also additional
restrictions, including other indebtedness, liens, fundamental changes,
disposition of property, restricted payments and investments.
The Borrower’s subsidiaries, other than Sunesys, Inc. and Sunesys of Virginia, Inc., are
guarantors under the Credit Agreement. The Company has made a
commitment to seek the necessary
regulatory approvals to permit Sunesys, Inc. and Sunesys of Virginia, Inc. to become guarantors
under the Credit Agreement.
1
The Credit Agreement is secured by a pledge of all the equity securities and interests of the
Company’s U.S. subsidiaries, up to
662/3% of the equity interests of the Company’s Mexican and
Canadian subsidiaries, and substantially all of the Company’s assets.
Using proceeds from borrowings under the Credit Agreement, the Company repaid loans in the
aggregate amount of $83.6 million outstanding as of
June 30, 2006 under its previous credit
facility and terminated such amended and restated credit facility. As a result of the entry into
the new Credit Agreement and refinancing of the previous credit facilities, the Company expects to
record a non-cash charge in the second quarter of 2006 of approximately $4.3 million related to the
write-off of deferred financing costs.
This summary of the terms of the Credit Agreement is qualified in its entirety by reference to the
complete text of the form of the Credit Agreement and form of Guaranty, each of which is filed as
an exhibit to this Current Report on Form 8-K and incorporated herein by reference.
The Company issued a press release describing the entry into the Credit Agreement, a copy of which
is attached to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| |
99.1 |
|
Form of Credit Agreement, dated as of June 30, 2006, among
InfraSource Incorporated, as borrower, InfraSource Services, Inc., Bank of
America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
JPMorgan Chase Bank, N.A., as Syndication Agent, Lasalle Bank National
Association and National City Bank as Co-Documentation Agents, and other
lenders party thereto. |
| |
99.2 |
|
Form of Guaranty, dated as of June 30, 2006 among the
Guarantors identified on the signature page, in favor of Bank of America, N.A.,
as administrative agent for itself and the other lenders under the Credit
Agreement. |
| |
99.3 |
|
Press Release, issued June 30, 2006, by InfraSource Services,
Inc. |
2