Secure wireless communications provider TeleCommunication Systems has netted a new US$130m senior secured credit agreement with its relationship banks.
The financing comprises a US$56.5m term loan A, US$43.5m delayed draw term loan facility and a US$30m…
Secure wireless communications provider TeleCommunication Systems has netted a new US$130m senior secured credit agreement with its relationship banks.
The financing comprises a US$56.5m term loan A, US$43.5m delayed draw term loan facility and a US$30m revolving credit facility. All the facilities mature on 31 March 2018 and pay an interest rate of 3.75% over Libor or 2.75% over Alternate Base Rate.
The credit agreement also includes the option for TCS to borrow an incremental US$25m if it requires.
Silicon Valley Bank is the administrative agent, co-lead arranger and joint bookrunner on the financing with GE Capital Markets co-lead arranger and joint bookrunner. Manufacturers & Traders Trust Company (M&T) and PNC Bank are additional lenders on the facility.
Proceeds from the term loan A have already been used to repay the US$40.5m outstanding of the 4% senior secured term loan that it agreed in mid-2012 and that was itself an amendment to a previous 2009 facility. The remaining US$16m is to be used for working capital and other general corporate purposes.
TCS chairman and CEO Maurice Tose commented: “Favourable credit market conditions led us to update for another 5 years the company’s arrangements for access to low-cost capital. As TCS proceeds to use its scale to address new customers around the world with secure, highly reliable wireless technology solutions, the strength and transparency of our balance sheet is an important differentiator.
“Silicon Valley Bank has worked with our company for more than a decade, and their focus on technology-based businesses has helped TCS to adapt to changing conditions and opportunities during that time, so we are pleased to continue to work with them and the additional very high quality institutions that have joined them in this arrangement.”
The move is part of a wider debt restructuring strategy by TCS as it seeks to push out maturities. Last month the company entered into privately-negotiated exchange agreements with noteholders to retire its US$50m of 4.5% convertible senior notes due in 2014. The notes were replaced with new 7.75% convertible senior unsecured notes due 2018.
