Bigblu Broadband has closed a new £30 million ($40 million) revolving credit facility with Santander Bank UK.

This will be used to replace the two tranches of loan notes totaling £12 million ($16 million) issued in 2016 by Business Growth Fund (BFG) and the group’s £10 million ($13 million) revolving credit facility with HSBC and to provide additional working capital to support the Group.

HSBC will continue to provide a £4 million ($5.2 million) revolving credit facility and operational banking support to the group’s UK fixed wireless subsidiary QCL Holdings Limited.

This provides the group with combined facilities of £34 million ($45 million) with Santander and HSBC.

The facility with Santander is a three-year loan agreement with an option to extend for up to a further two years. Interest terms are on a ratchet to LIBOR according to the group’s net leverage ratio. This replaces, in its entirety, the BGF loan notes which bore interest at a fixed coupon, and the HSBC facility which had an interest charge at a margin related to LIBOR. As a result, there will be a significant reduction in the group’s annual cost of debt and net interest payments. Further details on the BGF Loan Notes and HSBC Facility are included at the end of the announcement.

“I am delighted an institution such as Santander has recognized the progress BBB has made and the strong position the company is in. Being able to secure such attractive funding to supplement our increasingly cash generative business immediately following a successful FY19 financial year positions us well to continue our ambitious growth plans in FY20 and shows how robust the business model we are building has already become,” said Andrew Walwyn, CEO of BBB.