The 2010 Credit Facility provides for a $700 million unsecured revolving credit facility to be used for general corporate purposes. The 2010 Credit Facility has a four-year term, expiring 28 May 2014, and replaces the Company’s $350 million five-year credit agreement with the lenders signatory thereto, and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. as Joint Lead Arrangers and Joint Book Managers, Citibank, N.A. as Administrative Agent, JPMorgan Chase Bank, NA, as Syndication Agent, DnB NOR Bank ASA, New York Branch as Issuing Bank, The Bank Of Tokyo-Mitsubishi, Ltd., DnB NOR Bank ASA, New York Branch, and Wells Fargo Bank, N.A. as Co-Documentation Agents, and Mizuho Corporate Bank, Ltd. and SunTrust Bank as Co-Agents, which was scheduled to mature on 23 June 2010, and the related Guaranty made by the Company in favor of Citibank, N.A. (together, the "Prior Credit Facility").
Advances under the 2010 Credit Facility bear interest at LIBOR plus an applicable margin rate depending on the Company’s credit rating. The Company is required to pay an annual undrawn facility fee on the total $700 million commitment, which is also based on the Company’s credit rating.
The 2010 Credit Facility contains customary restrictive covenants on the Company and its subsidiaries. Restrictive covenants in the 2010 Credit Facility include, among other things, prohibitions on creating, incurring or assuming certain liens; entering into certain merger arrangements; selling, leasing, transferring or otherwise disposing of all or substantially all of its assets; making a material change in the nature of the business; and entering into certain transactions with affiliates. The Company is required to maint ain a debt to total capitalization ratio less than or equal to 50%. There are no other financial covenants. The Company has the right, subject to lender consent, to increase the commitments under the 2010 Credit Facility to an aggregate amount of up to $850 million.
The 2010 Credit Facility contains customary provisions regarding events of default, which could result in an acceleration in amounts due, including among others, payment default, failure to comply with covenants, material inaccuracy of representation or warranty, bankruptcy or insolvency proceedings, cross-default to other debt obligations, change of control, certain judgments and ERISA matters.
In addition to the Company, its wholly-owned subsidiaries ENSCO International Incorporated, ENSCO Universal Limited and ENSCO Offshore International Company may all borrow under the 2010 Credit Facility. The Company and two of its wholly-owned subsidiaries, ENSCO Global Limited and ENSCO International Incorporated, have issued the Second Amended and Restated Guaranty in favor of the lenders, pursuant to which each has guaranteed the payment of all obligations under the 2010 Credit Facility.
The foregoing description of the 2010 Credit Facility does not purport to be complete and is qualified in its entirety by reference to the 2010 Credit Facility, a copy of which along with a copy of the Second Amended and Restated Guaranty are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
