Zebra Technologies completed a comprehensive debt restructuring which included establishing a new $687.5 million senior secured term loan and increasing its revolving credit facility capacity to $500 million. JPMorgan served as administrative agent for the revolver, and Morgan Stanley agented the term loan.

The senior secured credit facility maturing July 2021 was initially priced at LIBOR + 2.00%, with the opportunity for reduced pricing upon attainment of certain debt leverage levels. This facility includes a $687.5 million term loan A and a $500 million revolving credit facility (increased from $250 million), on which $105 million was drawn at closing.

On Aug. 7, proceeds from the new facility will primarily be used to redeem $750 million of its 7.25% senior notes, maturing Oct. 2022 (notice was provided on July 6). The company plans to redeem the remaining $300 million of its 7.25% senior notes by the end of 2017 through lower-cost financing arrangements, including an accounts receivable securitization facility.

The company also amended its $1.4 billion term loan B facility maturing Oct. 2021, reducing the interest rate by 50 basis points to LIBOR + 2.00% effective today, and, in conjunction, retired $75 million of the principal balance. As previously communicated, the company expects to continue to reduce the principal balance prior to the maturity date.

“We are taking advantage of a favorable credit market to reduce our cost of capital and drive shareholder value. This comprehensive debt restructuring reduces our weighted average pre-tax interest rate on approximately $2.5 billion total debt outstanding by approximately 2 percentage points to below 4%, and drives more than $45 million of annual cash interest savings,” said Chief Financial Officer Olivier Leonetti.

As a result of the debt restructuring plan, the company expects to incur approximately $72 million of redemption costs and transaction fees, and approximately $18 million of non-cash accelerated amortization of debt issuance costs and discounts.

Lincolnshire, IL-based Zebra provides mobile computers, barcode scanners and barcode printers enhanced with software and service to enable real-time enterprise visibility.