Revolving credit facility
Fugro has a revolving credit facility in place with seven banks. On this 5-year facility of EUR 575 million, as per 31 December 2017, EUR 387 million has been drawn. The interest is EURIBOR plus 110 to 190 basis points, dependent on the level of net debt/EBITDA.
The credit facility contains covenant requirements, most notably net leverage (net debt/EBITDA) of below 3.0 and fixed charge cover of above 1.8 (above 2.0 as per March 2018). With net debt/EBITDA of 1.9 and a fixed charge cover of 2.2 per 31 December 2017, Fugro is well within its covenants.
2021 Convertible bonds
In October 2016, Fugro issued EUR 190 million in subordinated convertible bonds, maturing in 2021, and with a coupon of 4.0% and an initial conversion price of EUR 19.4416. The proceeds were fully used for early repayments on the private placement loans with US and UK investors (USPP notes) which were placed in 2002 and 2011, and carried a weighted average interest rate of around 5.7%.
The issue of the convertible bonds has resulted in additional headroom under the financial covenants, reduced interest expense and increased financial flexibility, as these bonds and related interest costs are excluded from the covenant ratios as described above.
Key characteristics of the 2021 convertible bond
Debt maturity per 30 December 2017 (X millions, euro equivalents)
* Will be lower than EUR 290 million if bonds are (partly) converted into equity
2024 Convertible bonds
On 2 November 2017, Fugro issued a further EUR 100 million in subordinated convertible bonds. These bonds carry a coupon of 4.5% and an initial conversion price of EUR 14.9412. Again, the proceeds were fully used for early repayment on the USPP notes, which were fully redeemed per year-end 2017. The bonds are trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange (symbol: ISIN: XS1508771216 respectively XS1711989928).
Key characteristics of the 2024 convertible bond