APTIM has amended its credit agreement to upsize its ABL borrowing base and permit a junior lien on the facility secured by its US Virgin Islands receivables, according to two sources following the company.

While the company also downsized the overall size of the ABL facility—to USD 130m from USD 175m—the increased borrowing base gives it extra liquidity. Nevertheless, holders saw little upside given the potential for layering.

One holder saw it as a foreshadowing of another decline in numbers. “Sure, this increases liquidity technically, but it could be on the back of worse numbers,” the source said. “The company will most likely add the junior lien ABL on top of the bondholders.”

APTIM is expected to report 4Q19 earnings in March, at which point it should reveal the extent of its borrowing base upsize, sources said.

As of 3Q19, APTIM’s borrowing base stood at USD 84.7m, and liquidity totaled USD 105m through USD 34m of revolver availability and USD 71m of cash.

APTIM was created as a standalone company in mid-2017 when Veritas acquired Chicago Bridge & Iron’s Capital Services business, as CB&I divested assets to tackle near-term maturities and looming covenant breaches.

Veritas bought the business for USD 755m, financing the deal with a USD 515m secured bond issue. APTIM began struggling with contract losses shortly after the buyout closed.

The company’s USD 515m 7.75% secured notes due 2025 dipped in odd lot trades today to 61 to yield 19.895%, according to MarketAxess. The last trade in size before the amendment was disclosed was on 29 January, at 62.5 for a 19.243% yield.

APTIM did not respond to a request for comment. A representative from Veritas declined to comment.

2020 Debtwire