Business communications company Mitel closed a new $500 million credit facility to capitalize on the rapidly-changing unified communications and collaboration market.

The new $500 million credit facility consists of a $150 million term loan and a $350 million revolving credit facility, both of which will mature in 2022.

The lending syndicate for the new facility included nine financial institutions led by Citizens Bank as administrative agent.

BMO Capital Markets, Canadian Imperial Bank of Commerce and HSBC Bank Canada served as joint lead arrangers and joint bookrunners. EA Markets provided Mitel with independent advisory and transaction services in conjunction with the arrangement and structuring of the facility.

The pricing of the term and revolver borrowings is based on the company’s net leverage ratio and will initially be at LIBOR plus 1.75%, an improvement of 275 basis points over the rate on pre-closing term loan borrowings, with undrawn commitment fees on the revolver initially being 25 basis points. The initial funding from the new credit facilities will be used to repay remaining debt outstanding under Mitel’s previous credit facilities in addition to accrued interest, fees and expenses.

“This new credit facility, combined with the recent divestiture of our mobile business, significantly strengthens Mitel’s capital structure,” said Steve Spooner, chief financial officer. “Since the beginning of the year, we have substantially reduced our net leverage and significantly increased our liquidity, giving us the financial capacity and flexibility to pursue growth opportunities, invest in the business, and implement other shareholder-enhancing initiatives.”