| Debt Obligations | Debt Obligations The Company's debt obligations as of September 30, 2017 and December 31, 2016 were as follows (in thousands): September 30, December 31, Aggregate outstanding principal balance, 2014 Term Loan Facility $ 92,224 $ 92,224 Repayment fee, 2014 Term Loan Facility 4,611 4,611 Unamortized discount - repayment fee, 2014 Term Loan Facility (2,821 ) (3,592 ) Unamortized debt issuance costs, 2014 Term Loan Facility (5,087 ) (4,054 ) Revolver borrowings, 2013 ABL Credit Facility 12,000 — Total debt obligations, net of unamortized discount and debt issuance costs 100,927 89,189 Less: short-term borrowings (12,000 ) — Long-term debt obligations, net $ 88,927 $ 89,189 2014 Term Loan Facility On December 15, 2014, the Company entered into a credit agreement (the “2014 Term Credit Agreement”) among the Company, certain of its subsidiaries, as guarantors, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. Cortland Capital Market Services LLC currently serves as administrative agent under the 2014 Term Credit Agreement. Principal, Interest and Maturity The 2014 Term Credit Agreement initially provided for a five -year $270.0 million term loan facility (the “2014 Term Loan Facility”), which the Company drew in full on the effective date of the 2014 Term Credit Agreement. At September 30, 2017, the aggregate outstanding principal balance of the 2014 Term Loan Facility was $92.2 million . Effective November 6, 2017, the Company amended the 2014 Term Credit Agreement pursuant to the Sixth Amendment. The Sixth Amendment, among other things, provides for an additional term loan in an amount equal to $15.0 million , which will be pari passu in right of payment with, and secured on a pari passu basis with the aggregate outstanding principal balance of the Company's 2014 Term Loan Facility. The additional term loan is expected to be drawn in full during November 2017 and will bear the same maturity date as the aggregate outstanding principal balance of the Company's 2014 Term Loan Facility. The 2014 Term Loan Facility initially bore interest at the “Adjusted Base Rate” plus an applicable margin of 8.75 percent , or the “Eurodollar Rate” plus an applicable margin of 9.75 percent . The interest rate in effect at September 30, 2017 and December 31, 2016 was 11 percent , which consisted of an applicable margin of 9.75 percent for Eurodollar Rate loans plus a LIBOR floor of 1.25 percent . Beginning with the date on which the additional term loan is funded, (the “Sixth Amendment Funding Date”), the interest rate will increase to 13 percent , consisting of an applicable margin of 11.75 percent for Eurodollar Rate loans plus a LIBOR floor of 1.25 percent . Beginning September 30, 2018, the applicable margin will increase an additional 100 basis points each quarterly period until maturity. Makewhole Under the 2014 Term Credit Agreement, with respect to prepayments made from inception of the Term Loan through September 30, 2017 , the Company has not been required to pay prepayment premiums in respect of the “makewhole amount.” However, future prepayments or refinancing of the balance of the 2014 Term Loan Facility will require the Company to pay a prepayment premium equal to the makewhole amount and the repayment fee described below. Pursuant to the Sixth Amendment and beginning with the Sixth Amendment Funding Date, if a prepayment is made on or before September 30, 2018, the makewhole amount will be calculated as the present value of all interest payments that would have been made on the amount prepaid from the date of the prepayment to June 15, 2019 at a rate per annum equal to the sum of the applicable margin on the date of the prepayment plus the greater of 1.25 percent and the Eurodollar rate in effect on the date of the repayment. If a prepayment is made after September 30, 2018, the makewhole amount will be calculated as the present value of all interest payments that would have been made on the amount prepaid from the date of the prepayment to December 15, 2019 at a rate per annum equal to the sum of the applicable margin on the date of the prepayment plus the greater of 1.25 percent and the Eurodollar rate in effect on the date of the repayment. Should a prepayment occur in full under the Sixth Amendment, the estimated makewhole amount due at future prepayment dates would be as follows (in thousands): December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, Makewhole $ 20,328 $ 16,843 $ 13,358 $ 9,874 $ 16,888 $ 12,331 $ 7,595 $ 3,350 Prior to the Sixth Amendment Funding Date, the makewhole amount was calculated as the present value of all interest payments that would have been made on the amount prepaid from the date of the prepayment to December 15, 2019 (or June 15, 2019 if the prepayment is made on or after June 15, 2018) at a rate per annum equal to the sum of 9.75 percent plus the greater of 1.25 percent and the Eurodollar rate in effect on the date of the repayment. Repayment Fee The Company was also required to pay a repayment fee on the date of any prepayment and on the maturity date of the 2014 Term Loan Facility equal to a total of $4.6 million , which was 5.0 percent of the amount prepaid or 5.0 percent of the aggregate remaining outstanding principal balance on the maturity date. The Company is amortizing the repayment fee as a discount, from that date through the maturity date of the 2014 Term Loan Facility, using the effective interest method. The unamortized amount of the repayment fee was $2.8 million and $3.6 million at September 30, 2017 and December 31, 2016 , respectively, based on the 5.0 percent repayment fee in effect as of those dates. Pursuant to the Sixth Amendment and beginning with the Sixth Amendment Funding Date, the repayment fee will increase to a total of $9.7 million , which is 9.0 percent of the amount prepaid or 9.0 percent of the aggregate remaining outstanding principal balance on the maturity date. Other The Company is the borrower under the 2014 Term Credit Agreement, with all of its obligations guaranteed by its material U.S. subsidiaries, other than excluded subsidiaries. Obligations under the 2014 Term Loan Facility are secured by a first priority security interest in, among other things, the borrower’s and the guarantors’ equipment, subsidiary capital stock and intellectual property (the “2014 Term Loan Priority Collateral”) and a second priority security interest in, among other things, the borrower’s and the guarantors’ inventory, accounts receivable, deposit accounts and similar assets. Unamortized debt issuance costs, primarily related to amendment fees associated with the 2014 Term Loan Facility, were $5.1 million and $4.1 million at September 30, 2017 and December 31, 2016 , respectively. These costs are being amortized through the maturity date of the 2014 Term Loan Facility using the effective interest method. The Company made no early payments during the nine months ended September 30, 2017 and $3.1 million of early payments during the nine months ended September 30, 2016 against its 2014 Term Loan Facility. As a result of these early payments, the Company recorded no debt extinguishment charges during the nine months ended September 30, 2017 and $0.1 million of debt extinguishment charges, which consisted of the write-off of debt issuance costs, during the nine months ended September 30, 2016 . On March 31, 2015 (the “First Amendment Closing Date”), March 1, 2016, July 26, 2016 and March 3, 2017, the Company amended the 2014 Term Credit Agreement pursuant to a First Amendment (the “First Amendment”), a Third Amendment (the “Third Amendment”), a Fourth Amendment (the “Fourth Amendment”) and a Fifth Amendment (the “Fifth Amendment”). These amendments, among other things, suspended the calculation of the Maximum Total Leverage Ratio and Minimum Interest Coverage Ratio for the period from December 31, 2014 through June 30, 2017 (the “Covenant Suspension Periods”) so that any failure by the Company to comply with the Maximum Total Leverage Ratio or Minimum Interest Coverage Ratio during the Covenant Suspension Periods shall not be deemed to result in a default or event of default. In consideration of the initial suspension of the calculation of the Maximum Total Leverage Ratio and Minimum Interest Coverage Ratio under the First Amendment, the Company issued 10.1 million shares, which was equivalent to 19.9 percent of the outstanding shares of common stock immediately prior to the First Amendment Closing Date, to KKR Lending Partners II L.P. and other entities indirectly advised by KKR Credit Advisers (US) LLC, which made them a related party. In connection with this transaction, the Company recorded debt covenant suspension charges of approximately $33.5 million which represented the fair value of the 10.1 million outstanding shares of common stock issued, multiplied by the closing stock price on the First Amendment Closing Date. In addition, the Company recorded debt extinguishment charges of approximately $0.8 million related to the write-off of debt issuance costs associated with the Company's 2014 Term Credit Agreement. In consideration for the Third Amendment, Fourth Amendment and Fifth Amendment, the Company paid a total of $4.6 million in amendment fees in 2016 and $2.3 million in amendment fees during the nine months ended September 30, 2017 . The amendment fees are recorded as direct deductions from the carrying amount of the 2014 Term Loan Facility and are being amortized through the maturity date of the 2014 Term Loan Facility using the effective interest method. 2013 ABL Credit Facility On August 7, 2013, the Company entered into a five -year asset based senior revolving credit facility maturing on August 7, 2018 with Bank of America, N.A. serving as sole administrative agent for the lenders thereunder, collateral agent, issuing bank and swingline lender (as amended, the “2013 ABL Credit Facility”). The aggregate amount of commitments for the 2013 ABL Credit Facility is $100.0 million , which is comprised of $90.0 million for the U.S. facility (the “U.S. Facility”) and $10.0 million for the Canadian facility (the “Canadian Facility”). In the third quarter of 2017, the Company borrowed $12.0 million under the 2013 ABL Credit Facility for working capital purposes and to fund revenue growth and operating losses. On November 6, 2017, the Company borrowed an additional $17.0 million under the 2013 ABL Credit Facility. The 2013 ABL Credit Facility includes a sublimit of $80.0 million for letters of credit. The borrowers under the U.S. Facility consist of all of the Company’s U.S. operating subsidiaries with assets included in the borrowing base, and the U.S. Facility is guaranteed by Willbros Group, Inc. and its material U.S. subsidiaries, other than excluded subsidiaries. The borrower under the Canadian Facility is Willbros Construction Services (Canada) LP, and the Canadian Facility is guaranteed by Willbros Group, Inc. and all of its material U.S. and Canadian subsidiaries, other than excluded subsidiaries. Advances under the U.S. and Canadian Facilities are limited to a borrowing base consisting of the sum of the following, less applicable reserves: • 85 percent of the value of “eligible accounts” (as defined in the 2013 ABL Credit Facility); • the lesser of (i) 75 percent of the value of “eligible unbilled accounts” (as defined in the 2013 ABL Credit Facility) and (ii) $33.0 million minus the amount of eligible unbilled accounts then included in the borrowing base; and • “eligible pledged cash”. The Company is also required, as part of its borrowing base calculation, to include a minimum of $25.0 million of the net proceeds of the sale of Bemis, LLC and the balance of the Professional Services segment as eligible pledged cash. The Company has included $40.0 million as eligible pledged cash in its September 30, 2017 borrowing base calculation, which is included in “Restricted cash” on its Condensed Consolidated Balance Sheets . The aggregate amount of the borrowing base attributable to eligible accounts and eligible unbilled accounts constituting certain progress or milestone billings, retainage and other performance-based benchmarks may not exceed $23.0 million . Advances in U.S. dollars bear interest at a rate equal to LIBOR or the U.S. or Canadian base rate plus an additional margin. Advances in Canadian dollars bear interest at the Bankers Acceptance (“BA”) Equivalent Rate or the Canadian prime rate plus an additional margin. The interest rate margins will be adjusted each quarter based on the Company’s fixed charge coverage ratio as of the end of the previous quarter as follows: Fixed Charge Coverage Ratio U.S. Base Rate, Canadian Base Rate and Canadian Prime Rate Loans LIBOR Loans, BA Rate Loans and Letter of Credit Fees >1.25 to 1 1.25% 2.25% < 1.25 to 1 and >1.15 to 1 1.50% 2.50% < 1.15 to 1 1.75% 2.75% The Company will also pay an unused line fee on each of the U.S. and Canadian Facilities equal to 50 basis points when usage under the applicable facility during the preceding calendar month is less than 50 percent of the commitments or 37.5 basis points when usage under the applicable facility equals or exceeds 50 percent of the commitments for such period. With respect to the letters of credit, the Company will pay a letter of credit fee equal to the applicable LIBOR margin, shown in the table above, on all letters of credit and a 0.125 percent fronting fee to the issuing bank, in each case, payable monthly in arrears. Obligations under the 2013 ABL Credit Facility are secured by a first priority security interest in the borrowers’ and guarantors’ accounts receivable, deposit accounts and similar assets (the “ABL Priority Collateral”) and a second priority security interest in the 2014 Term Loan Priority Collateral. As of September 30, 2017 , the Company's unused availability was $32.5 million , net of outstanding letters of credit of $55.5 million and outstanding revolver borrowings of $12.0 million . On November 6, 2017, the Company borrowed an additional $17.0 million under the 2013 ABL Credit Facility. If the Company’s unused availability under the 2013 ABL Credit Facility is less than the greater of (i) 15.0 percent of the revolving commitments or $15.0 million for five consecutive days, or (ii) 12.5 percent of the revolving commitments or $12.5 million at any time, or upon the occurrence of certain events of default under the 2013 ABL Credit Facility, the Company is subject to increased reporting requirements, the administrative agent shall have exclusive control over any deposit account, the Company will not have any right of access to, or withdrawal from, any deposit account, or any right to direct the disposition of funds in any deposit account, and amounts in any deposit account will be applied to reduce the outstanding amounts under the 2013 ABL Credit Facility. In addition, if the Company's unused availability under the 2013 ABL Credit Facility is less than the amounts described above, the Company would be required to comply with a Minimum Fixed Charge Coverage Ratio of 1.15 to 1.00. Based on its current forecasts, the Company does not expect its unused availability under the 2013 ABL Credit Facility to be less than the amounts described above and therefore does not expect the Minimum Fixed Charge Coverage Ratio to be applicable over the next twelve months. If the Minimum Fixed Charge Coverage Ratio were to become applicable, the Company would not expect to be in compliance over the next twelve months and would therefore be in default under its credit agreements. Events of Default A default under the 2014 Term Loan Facility and the 2013 ABL Credit Facility may be triggered by events such as a failure to comply with financial covenants or other covenants under the 2014 Term Loan Facility and the 2013 ABL Credit Facility, a failure to make payments when due under the 2014 Term Loan Facility and the 2013 ABL Credit Facility, a failure to make payments when due in respect of, or a failure to perform obligations relating to, debt obligations in excess of $15.0 million , a change of control of the Company and certain insolvency proceedings. A default under the 2013 ABL Credit Facility would permit the lenders to terminate their commitment to make cash advances or issue letters of credit, require the immediate repayment of any outstanding cash advances with interest and require the cash collateralization of outstanding letter of credit obligations. A default under the 2014 Term Loan Facility would permit the lenders to require immediate repayment of all principal, interest, fees and other amounts payable thereunder. The 2014 Term Credit Agreement and the 2013 ABL Credit Facility also include customary representations and warranties and affirmative and negative covenants, including: • the preparation of financial statements in accordance with GAAP; • the identification of any events or circumstances, either individually or in the aggregate, that has had or could reasonably be expected to have a material adverse effect on the business, results of operations, properties or financial condition of the Company; • limitations on liens and indebtedness; • limitations on dividends and other payments in respect of capital stock; • limitations on capital expenditures; and • limitations on modifications of the documentation of the 2013 ABL Credit Facility. Fair Value of Debt The estimated fair value of the Company’s debt instruments as of September 30, 2017 and December 31, 2016 was as follows (in thousands): September 30, December 31, 2014 Term Loan Facility $ 98,685 $ 95,577 Revolver borrowings, 2013 ABL Credit Facility 12,000 — Total fair value of debt instruments $ 110,685 $ 95,577 The 2014 Term Loan Facility and revolver borrowings under the 2013 ABL Credit Facility are classified within Level 2 of the fair value hierarchy. The fair value of the debt instruments have been estimated using discounted cash flow analyses based on the Company’s incremental borrowing rate for similar borrowing arrangements. |
