Revolving credit facility
Fugro has a revolving credit facility in place with seven banks. On this 5-year facility of EUR 500 million, as per 15 November 2016 EUR 160 million has been drawn. The interest is EURIBOR plus 110 to 190 basis points, dependent on the level of net debt/EBITDA.
US private placement loans
In addition, Fugro has private placement loans with US and UK investors (‘United States Private Placement notes’ or USPPs). These loans, placed in 2002 and 2011, carry a weighted average interest rate of around 5.7%. In November 2016, a significant part of these loans was repaid early from generated cash flow and the proceeds from the EUR 190 million subordinated convertible bonds (see below).
Both the bank loan (revolving credit facility) and the private placement notes contain certain covenant requirements, most notably net leverage (net debt/ EBITDA) of below 3.0 and fixed charge cover of above 1.8. With net debt/EBITDA of 1.8 and a fixed charge cover of 2.6 per the end of September 2016, Fugro is well within its covenants.
Subordinated convertible bonds
In October 2016, Fugro issued EUR 190 million in subordinated convertible bonds. The proceeds were fully used for early repayment of USPP notes. This has resulted in additional headroom under the financial covenants, reduced interest expense and increased financial flexibility. The related bond amount and interest costs will be excluded from the covenant ratios.
The subordinated convertible bonds, maturing in 2021, carry a coupon of 4.0% and an initial conversion price of EUR 19.4416. The certificates underlying the bonds correspond to approximately 11.5% of Fugro’s issued share capital. Fugro may decide to use part of its treasury shares to service any conversion rights above the authorised 10% of issued share capital, as approved by the annual general meeting on 29 April 2016. The bonds are trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.
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Debt maturity profile per 15 November 2016 (in millions, euro equivalents)