Switch plans to extend revolver to 2023, modify financial covenants

By Sarah Lizee

Olympia, Wash., Sept. 8 – Switch, Inc. plans to amend its credit agreement with Wells Fargo Bank, NA as administrative agent to modify financial covenants and extend the maturity of the revolver to June 27, 2023, according to an 8-K filing with the Securities and Exchange Commission.

Subsidiary Switch, Ltd. intends to offer $500 million of senior notes due 2028 in a private offering. The facility amendment is conditioned on Switch having received at least $500 million of gross proceeds from the issuance and a portion of the proceeds being used to reduce the company’s term loan facility to $400 million.

The second amendment would modify the financial covenant from a consolidated total leverage ratio to a consolidated secured leverage ratio, which only includes debt that is secured by a lien on assets of the borrower and its subsidiaries, and set the consolidated secured leverage ratio at 4x for each fiscal quarter.

The amendment would also modify certain basket availability tests from a consolidated total leverage ratio to a consolidated secured leverage ratio, and refresh or increase certain baskets for restricted payments, investments and junior debt payments.

The borrower expects to enter into the amendment on the closing date for the note offering.

Switch is a Las Vegas-based developer and operator of data centers.

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