8-KMaterial AgreementsFinancial EventsExhibits & Filings

QUANTA SERVICES, INC. 8-K Report, Material Agreement (Nov 6, 2017)

Filed November 6, 2017For Securities:PWR

Summary

Quanta Services, Inc. (PWR) has filed an 8-K report detailing a significant amendment to its credit agreement. Effective October 31, 2017, the company extended the maturity date of its $1.810 billion senior secured revolving credit facility by two years, moving it from December 18, 2020, to October 31, 2022. This amendment also revises the interest rate structure for U.S. dollar and foreign currency borrowings, as well as fees for letters of credit, linking them to the Company's Consolidated Leverage Ratio. The updated credit terms introduce variable interest rates based on either the Eurocurrency Rate or the Base Rate, plus a spread that fluctuates between 0.125% and 2.000% depending on the leverage ratio. Similarly, letter of credit fees are adjusted. As of the amendment's closing, Quanta had $384.9 million in outstanding letters of credit and $685.0 million in revolving loans, with $740.1 million remaining available under the facility. This extension provides Quanta with enhanced financial flexibility and a longer runway for its operations.

Key Highlights

  • 1Extended maturity date of the $1.810 billion senior secured revolving credit facility by two years, to October 31, 2022.
  • 2Modified the interest rate structure for U.S. dollar borrowings, offering options based on Eurocurrency Rate or Base Rate plus a leverage-dependent spread.
  • 3Updated interest rate structure for foreign currency borrowings, tied to the Eurocurrency Rate plus a leverage-dependent spread.
  • 4Revised fees for standby, commercial, and performance letters of credit, also based on the Consolidated Leverage Ratio.
  • 5Defined key financial metrics for rate determination: Consolidated Leverage Ratio (Total Funded Debt to Consolidated EBITDA, adjusted for cash), Base Rate, and Eurocurrency Rate.
  • 6As of October 31, 2017, $384.9 million in letters of credit and $685.0 million in revolving loans were outstanding.
  • 7Approximately $740.1 million of the credit facility remained available for further borrowings or letters of credit.

Frequently Asked Questions

The primary purpose of this filing is to announce a material amendment to Quanta Services, Inc.'s credit agreement, specifically extending the maturity date of its revolving credit facility and modifying the associated interest rate and fee structures.

Extending the maturity date provides Quanta Services with greater financial certainty and flexibility by securing access to its $1.810 billion credit facility for an additional two years. This allows the company to plan its operations and investments with less immediate concern about refinancing debt.

The new interest rates for U.S. dollar borrowings are determined by Quanta's option: either the Eurocurrency Rate plus a spread of 1.125% to 2.000%, or the Base Rate plus a spread of 0.125% to 1.000%. The specific spread in each case is dependent on the Company's Consolidated Leverage Ratio. Foreign currency borrowings and letter of credit fees are also tied to the Consolidated Leverage Ratio.

As of October 31, 2017, Quanta Services had $384.9 million in outstanding letters of credit and bank guarantees, and $685.0 million in outstanding revolving loans. This left approximately $740.1 million of the credit facility commitment available for future use.