Mitel Networks announced that its syndicate of lenders agreed to amend certain covenants contained in its senior secured credit facility. The amendment provides greater flexibility with respect to Mitel’s permitted leverage ratio, the primary financial covenant contained in the credit agreement.
According to a related 8-K filing, the lender group is led by Bank of America as the administrative agent and collateral agent.
Mitel said the total borrowing amounts under the credit facility and maturity dates have not changed. The company’s total $710 million credit facilities consist of an undrawn $50 million revolving credit facility and a fully drawn $660 million term loan facility. The revolving credit facility matures on April 29, 2020 and the term loan facility matures on April 29, 2022.
- Increase the leverage ratio covenant to a maximum of 5.25 times consolidated EBITDA through the quarter ending December 31, 2015, declining to 4.75 times for the quarter ending March 31, 2016 and thereafter returning to existing covenant levels consistent with the terms of the Existing Credit Agreement;
- Increase the applicable margin on the initial term loans from 4.00% to 4.50% for eurocurrency rate loans and from 3.00% to 3.50% for base rate loans;
- Provide for a prepayment premium of 1.0% on the amount of any mandatory prepayments made on or prior to September 29, 2016 in connection with a repricing event or if a repricing event shall otherwise occur on or prior to such date;
- Amend the definition of “ECF percentage” to require the company to use 75% of its excess cash flow to repay indebtedness under the existing credit agreement when the leverage ratio is greater than or equal to 3.50 to 1.00.
The credit agreement amendment modifies the company’s existing credit agreement, dated as of April 29, 2015, to, among other things: