Brocade refinances term loan to cut margin to Libor plus 237.5 bps

By Jennifer Chiou

New York, June 10 - Brocade Communications Systems Inc. announced that it amended its senior secured credit facility, extending the maturity by one year to October 2014. As a result of its term loan refinancing, the company reduced term loan pricing to Libor plus 237.5 basis points from Libor plus 400 bps.

The amendment also eliminated the Libor floor, which was 3%.

Brocade estimated in a company news release that it could save up to about $4 million of interest payments through the fiscal year ending Oct. 29 with the interest reduction.

"We are pleased with the lower interest rate and improved flexibility that this amendment provides the company going forward," chief financial officer Richard Deranleau said in the release.

"Brocade has made many improvements in our financial performance, balance sheet metrics and cash flow, which helped us to obtain these more favorable terms."

As of Friday, about $250 million was outstanding under the credit facility.

Brocade is a San Jose, Calif.-based supplier of end-to-end internet protocol based ethernet and storage area networking products for enterprises and service providers.

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