Aegion Corporation Secures Successful Credit Facility Amendment, Resulting in Projected 2021 Annual Interest Savings of Nearly $4 Million

ST. LOUIS, Nov. 30, 2020 (GLOBE NEWSWIRE) -- Aegion Corporation (NASDAQ:AEGN) today announced the successful completion of an amendment to its senior secured credit facility, resulting in significant annual interest savings while continuing to ensure ample liquidity.

In April 2020, the Company completed a credit facility amendment that provided increased borrowing capacity and expanded covenant flexibility in exchange for higher rates, as a proactive liquidity measure to weather the significant uncertainty at the onset of the COVID-19 pandemic. Based on the Company’s strong performance in recent months as well as management’s confidence in future cash flows, the new amendment secures more favorable rates while still ensuring flexibility to manage through downside risks.

The amendment is projected to result in nearly $4 million in interest savings in 2021 on expected term loan borrowings, compared to the previous amendment, based on the Company’s projected consolidated leverage ratios. Under the revised covenant structure, the Company projects to have significant potential borrowing capacity on the revolving line of credit in 2021.

Among key components of the amendment:

• The credit facility consists of a $175 million revolving line of credit and a $228 million term loan facility, each with a maturity date in February 2023, which remain unchanged.
• Interest is charged at the British Bankers’ Association LIBOR rate plus an applicable rate ranging from 1.25% to 3.25% depending on the Company’s consolidated leverage ratio. The amended facility also provides a 25 basis-point floor for the base LIBOR rate, a reduction of 50 basis points from the April amendment.
• Revised financial covenants include: 1) a consolidated financial leverage ratio not to exceed 3.50 to 1.00 at December 31, 2020, 3.25 to 1.00 at March 31, 2021, and not more than 3.00 to 1.00 beginning with the quarter ending June 30, 2021; and 2) a consolidated fixed charge coverage ratio of not less than 1.15 to 1.00 at December 31, 2020, increasing to 1.20 to 1.00 at March 31, 2021 and 1.25 to 1.00 beginning with the quarter ending June 30, 2021.
  

Charles R. Gordon, Aegion’s President and CEO, said, “This successful amendment is a testament to Aegion’s strong earnings and cash flow generation through the global pandemic – with projections for continued momentum going forward. The longstanding relationships with our lending group allowed us to achieve a more-optimal rate structure, while maintaining flexibility to manage the business. We remain very pleased with our balance sheet and liquidity position – the strongest in the last several years – and believe they will be enablers for earnings growth over the next 12 to 24 months.”