Galaxy Gaming refinanced its existing indebtedness, closing a credit agreement with ZB dba Nevada State Bank. The agreement provides Galaxy with up to $12 million in borrowing capacity, $11 million in the form of a five-year term loan and $1 million in the form of one-year revolving credit facility.
Interest on amounts outstanding under the agreement will be calculated based on one-month US dollar LIBOR plus an applicable margin which will be determined based on the company’s leverage ratio. The term loan amortizes monthly together with interest, both calculated mortgage-style over a seven-year term. The remaining outstanding principal of the term loan is due on April 24, 2023. Borrowings under the agreement are secured by a lien on substantially all of Galaxy Gaming’s assets.
The proceeds of the term loan, together with cash on hand, were used to repay in full the remaining principal amount of its existing indebtedness, together with accrued but unpaid interest and an early redemption premium, to affiliates of Breakaway Capital Partners. The company also redeemed warrants to purchase 1,965,780 shares of the company’s common stock that had been issued to the Breakaway affiliates in connection with the loans made by them. The company estimates that the repayment of the Breakaway loans, the redemption of the warrants and the payment of fees and expenses related to all of the transactions will require $11.1 million.
“This transaction reduces the interest rate on our borrowings from 12.5% to 6.8%.” said Harry C. Hagerty, Galaxy Gaming’s CFO. “Our new rate is much more in line with what a company with our leverage and cash flow characteristics should be paying.”
Headquartered in Las Vegas, Galaxy Gaming develops, manufactures and distributes proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, cruise ships and online casinos worldwide.
