Vonage amends credit agreement to modify definitions, covenants

By Sarah Lizee

Olympia, Wash., March 15 – Vonage Holdings Corp. amended its credit agreement on March 11 with JPMorgan Chase Bank, NA as administrative agent, consisting of a $500 million revolving credit facility and a $100 million term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The amendment modified the definition of “change of control” in the credit agreement to include a fundamental change and make-whole fundamental change.

The definition of “consolidated EBITDA” was also changed to permit the adding back of some non-cash purchase accounting adjustments and any adjustments as required by the application of some provisions of the FASB Accounting Standards Codification.

Also, the definition of “indebtedness” was changed to exclude obligations of the company relating to some permitted unsecured securities offerings and derivative transactions.

The definitions of “specified swap obligation” and “swap contract” were changed to exclude some permitted derivative transactions.

Some negative covenants were modified to permit the issuance and conversion of some unsecured securities offerings, the entry into some derivative transactions and transactions entered into and restricted payments made in connection therewith.

The amendment also increased the financial covenant applicable to the first adjusted covenant period permitted therein from 3.5x for a specified quarter and the three consecutive fiscal quarters after that to 3.5x at the end of a specified quarter, 3.75x for the three consecutive fiscal quarters after that, 3.5x for the fourth fiscal quarter after that and 3.25x for the fifth fiscal quarter onwards.

Lastly, the amendment excluded some transactions entered into in connection with some unsecured securities offerings from triggering an event of default.

Vonage is a Holmdel, N.J.-based cloud communications company. NewVoiceMedia is a provider of cloud contact center technology.

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