8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 21, 2005

Hanover Compressor Company
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-13071	76-0625124
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
12001 North Houston Rosslyn, Houston, Texas		77086
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (281) 447-8787

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Hanover Compression Limited Partnership
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	333-75814-1	75-2344249
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
12001 North Houston Rosslyn, Houston, Texas		77086
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (281) 447-8787

n/a
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On November 21, 2005, Hanover Compressor Company ("Hanover") and its wholly owned subsidiary, Hanover Compression Limited Partnership ("HCLP", together with Hanover, sometimes referred to herein as the "Borrowers") entered into a senior secured credit agreement (the "Credit Agreement") with a syndicate of lenders and financial institutions named therein as parties thereto and JP Morgan Chase Bank, N.A. as Administrative Agent and The Royal Bank of Scotland plc as Syndication Agent. J.P. Morgan Securities Inc. and RBS Securities Corporation acted as Co-Lead Arrangers on the facility.

The new credit facility under the Credit Agreement consists of a five-year $450 million revolving credit facility ("Revolver"), of which $48 million was drawn at closing with an additional $121.8 million of letters of credit outstanding. The Credit Agreement also provides for a Term Loan facility of up to $300 million ("Term Loan"). The Term Loan is undrawn and was not syndicated with the Revolver. The Term Loan provid es flexibility to Hanover and HCLP as we review refinancing opportunities in the future. Borrowings under the Credit Agreement are secured by substantially all of the unencumbered personal property and real property assets of the Borrowers. In addition, all of the capital stock of the domestic subsidiaries and 66% of the capital stock of the first tier foreign subsidiaries has been pledged to secure the obligations under the Credit Agreement. Up to $75 million of the Revolver can be borrowed in Eurocurrency equivalent loans. The Revolver bears interest at Borrowers’ option, (i) at the greater of the Administrative Agent’s prime rate or Federal Funds Effective Rate plus 0.50%, (ii) the Eurocurrency Rate, or (iii) the Eurodollar Rate ("LIBOR"), in each case plus an applicable margin ranging from 1.375% to 2.5% depending on Borrower’s consolidated leverage ratio. The interest rate on our initial borrowings is 1.750% plus LIBOR.

Under the Credit Agreement, the Borrowers are subje ct to certain limitations, including limitations on their ability to incur additional debt or sell assets, to grant liens, to make certain acquisitions and investments and to pay dividends and distributions. The Credit Agreement contains certain affirmative covenants, including requirements to furnish financial statements and certificates, to maintain properties and to pledge capital stock of newly created subsidiaries. The Borrowers are also subject to financial covenants which include a consolidated debt to consolidated EBITDA ratio, a minimum consolidated tangible net worth test, a consolidated senior secured indebtedness to consolidated adjusted EBITDA ratio, and an interest coverage ratio. The Credit Agreement specifies a number of events of default (many of which are subject to applicable cure periods), including among others, the failure to make payments when due, defaults under other agreements or instruments of indebtedness, change of control and noncompliance with covenants. Upon the occurrence of an event of default, the lenders may terminate the facility and declare all amounts outstanding to be immediately due and payable.

On November 21, 2005 Hanover issued a press release with respect to the foregoing.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Information contained in Item 1.01 of this Form 8-K is hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release, dated November 21, 2005 regarding the execution of a new $450 million credit facility.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Hanover Compressor Company
November 21, 2005	By:	Lee E. Beckelman
		Name: Lee E. Beckelman
		Title: Vice President and Chief Financial Officer

	Hanover Compression Limited Partnership
November 21, 2005	By:	Lee E. Beckelman
		Name: Lee E. Beckelman
		Title: Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release, dated November 21, 2005 regarding the execution of a new $450 million credit facility.

EX-99.1

Hanover Compressor Company

Press Information

Houston, November 21, 2005

Hanover Compressor Company Announces Close

of $450 Million Credit Facility

Hanover Compressor Company (NYSE: HC), a global market leader in full-service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications, announced today that it has closed a five-year, $450 million senior secured revolving credit facility with a syndicate of lenders and financial institutions. This facility replaces the company’s $350 million bank credit facility that was due to mature in December 2006.

“In addition to providing Hanover the ability to pursue attractive growth opportunities, the new revolving line of credit gives Hanover the ability to reduce its financing costs and has extended its credit facility maturity date,” said Lee Beckelman, Vice President and Chief Financial Officer.

The new credit facility was closed with JPMorgan Securities Inc., and RBS Securities Corporation, as Co-Lead Arrangers; JPMorgan Chase Bank, N.A., as Administrative Agent; and The Royal Bank of Scotland plc as Syndication Agent.

*****

About Hanover Compressor Company
Hanover Compressor Company (NYSE: HC) is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. Founded in 1990 and a public company since 1997, Hanover’s customers include both major and independent oil and gas producers and distributors as well as national oil and gas companies. More information can be found on the Internet (www.hanover-co.com).

Forward-looking Statements
Certain matters discussed in this presentation are “forward-looking statements” intended to qualify for the safe harbors established by the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified as such because of the context of the statement or because the statement includes words such as “believes,” “anticipates,” “expects,” “estimates,” or words of similar import. Similarly, statements that describe Hanover’s future plans, objectives or goals or future revenues or other financial measures are also forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated as of the date the statements were made. These risks and uncertainties include, but are not limited to: our inability to renew our short-term leases of equipment with our customers so as to fully recoup our cost of the equipment; a prolonged substantial reduction in oil and natural gas prices, which could cause a decline in the demand for our compression and oil and natural gas production equipment; reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies; changes in economic or political conditions in the countries in which we do business, including civil uprisings, riots, terrorism, the taking of property without fair compensation and legislative changes; changes in currency exchange rates; the inherent risks associated with our operations, such as equipment defects, malfunctions and natural disasters; governmental safety, health, environmental and other regulations, which could require us to make significant expenditures including our ability to timely and cost-effectively execute projects in new international operating environments; our inability to implement certain business objectives such as international expansion, integrating acquired businesses, generating sufficient cash, accessing capital markets, refinancing existing or incurring additional indebtedness to fund our business, and executing our exit and sale strategy with respect to assets classified on our balance sheet as assets held for sale; risks associated with any significant failure or malfunction of our enterprise resource planning system and our inability to comply with covenants in our debt agreements and the decreased financial flexibility associated with our substantial debt. A discussion of these and other factors is included in the Company’s periodic reports filed with the Securities and Exchange Commission.

Investor Relations Inquiries:
Richard Goins
Vice President, Investor Relations and Technology
Tel: (832) 554-4856
E-mail: syork@hanover-co.com

Media Relations Inquiries:
Stephen York
Manager, Corporate Communications
Tel: (832) 554-4918
E-mail: rbgoins@hanover-co.com