Electronics For Imaging entered into an engagement letter with Citibank to use its commercially reasonable efforts to arrange a syndicate of lenders to provide the company with a senior secured revolving credit facility in an aggregate principal amount of up to $150 million.
Proceeds from the facility will be used for general corporate purposes.
Interest under the credit facility is intended to accrue at a rate between LIBOR plus 1.125% and LIBOR plus 1.875%, based on the company’s ratio of Indebtedness to Consolidated EBITDA (to be defined in the definitive documentation for the credit facility). Based on this ratio, the expected opening interest rate under the credit facility will be LIBOR plus 1.375%. The term of the credit facility is intended to be five years.
Additionally, the credit facility is intended to have financial covenants that will require the company to maintain maximum leverage and minimum interest coverage ratios. Effectiveness of the credit facility is intended to be subject to various conditions, including, (i) the negotiation and execution of definitive documentation consistent with the engagement letter (or as otherwise agreed between the company, Citi and the other lenders participating in the credit facility), (ii) delivery of certain audited, unaudited and pro forma financial statements and reasonably satisfactory financial statement projections, (iii) the absence of a material adverse effect, (iv) the accuracy of certain representations and warranties of the company and its subsidiaries to be set forth in the definitive loan documents, (v) successful syndication of the credit facility, and (vi) other customary closing conditions. There can be no assurance that the company will enter into a definitive agreement for the credit facility upon the terms contemplated or other terms, or at all.