Riverbed Technology gets $300 million term loan, $300 million revolver

By Angela McDaniels

Tacoma, Wash., Dec. 26 - Riverbed Technology, Inc. entered into a credit agreement on Dec. 20 for a $300 million senior secured term loan and a $300 million senior secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Both the term loan and the revolver mature on Dec. 20, 2018.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the joint lead arrangers and joint bookrunners. JPMorgan Chase Bank, NA is the administrative agent and collateral agent. Wells Fargo Bank, NA is the syndication agent. HSBC Bank USA, NA is the documentation agent.

The initial interest rate is Libor plus 175 basis points, and the commitment fee for the revolver is 25 bps. The margin over Libor ranges from 125 bps to 200 bps, and the commitment fee is either 25 bps or 30 bps. Both depend on the company's leverage ratio.

The credit agreement has an accordion feature for $150 million plus additional amounts subject to compliance on a pro forma basis with a secured leverage ratio of 2.75 to 1.00.

Riverbed can prepay loans at any time without premium or penalty. It must use the proceeds of certain asset sales and debt issuances to prepay the term loan.

The term loan requires amortization payments of 1.25% per quarter in the first two years, which increases to 2.5% per quarter thereafter, with the balance due at maturity.

The credit agreement allows Riverbed to extend the maturity date for the term loans or revolving loans.

All obligations under the credit facilities are unconditionally guaranteed by some of Riverbed's direct and indirect domestic restricted subsidiaries.

The financial covenants require that Riverbed maintain a maximum leverage ratio of 3.5 to 1.0 and a minimum interest coverage ratio of 3.5 to 1.0. The maximum leverage ratio steps down to 3.25 to 1.00 in the quarter ending March 31, 2015 and to 3 to 1 in the quarter ending March 31, 2016.

Riverbed drew down the entire term loan and $225 million of the revolver and used the proceeds to refinance its Dec. 18, 2012 credit agreement with Morgan Stanley Senior Funding, Inc. as administrative agent. The refinanced credit agreement was then terminated.

Riverbed is a San Francisco-based IT performance company.

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