TETRA Technologies amends financing agreements

TETRA Technologies Inc. (NYSE:TTI) has amended its revolving credit agreement with JPMorgan Chase Bank NA and the other lenders thereto and has amended and restated its Note Purchase Agreement with an affiliate of GSO Capital Partners LP (GSO).

By executing the Agreement and Fourth Amendment to Credit Agreement dated July 1, 2016 with JPMorgan, as administrative agent, and the other lender parties, TETRA resolves its previously reported concerns regarding future compliance with the interest coverage ratio covenant under the Credit Agreement dated June 27, 2006.  The interest coverage ratio covenant was replaced with a more customary fixed charge coverage ratio covenant and the maximum consolidated leverage ratio was increased from 3.0X to 4.0X from June 30, 2016 through March 31, 2018, with subsequent step downs.  In connection with the Fourth Amendment, the company and certain of its subsidiaries (other than CSI Compressco LP (NASDAQ:CCLP) and its subsidiaries) pledged collateral to secure the obligations under the credit agreement.  The amendment also included additional negative covenants consistent with those included in the Amended and Restated Note Purchase Agreement with GSO and increased the applicable margin, based on the company's leverage ratio. The Fourth Amendment maintains the previous $225 million commitment level under the credit agreement.

Simultaneously with the execution of the Fourth Amendment, the company executed its Amended and Restated Note Purchase Agreement dated July 1, 2016 with GSO regarding the company's $125 million of 11% senior notes maturing in 2022.  The Amended and Restated Note Purchase Agreement, which supersedes the previously executed Note Purchase Agreement dated November 5, 2015, was amended to delete the interest coverage ratio covenant and replace it with a more customary fixed charge coverage ratio covenant and increase the maximum consolidated leverage ratio from 3.5X to 4.5X from June 30, 2016 through March 31, 2018, with subsequent step downs.  The company and certain of its subsidiaries (other than CSI Compressco LP and its subsidiaries) also provided GSO with a security interest in the same collateral that was provided under the Fourth Amendment.

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