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Ribbon Communications details amended facility, $75 million prepayment
By William Gullotti
Buffalo, N.Y., March 30 – Ribbon Communications Operating Co., Inc., with parent company Ribbon Communications Inc. acting as guarantor, detailed the amendments made on March 24 to its credit agreement with Citizens Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The $330,453,478 credit agreement, downsized from $500 million, comprises a $255,453,478 term loan and a $75 million revolver. The revolver has a $20 million sublimit each for letters of credit and swingline loans.
The amendment replaces Libor with SOFR and there is a fixed applicable margin of 450 basis points. The facility’s commitment fee, applied to the daily amount of unused facility commitments, is fixed at 50 bps.
As previously reported, the amendment reduces the minimum consolidated fixed-charge coverage ratio and increases the maximum consolidated net leverage ratio that Ribbon must comply with on a quarterly basis with the quarter ending March 31, 2023 through March 31, 2024.
In connection with the amendment to the credit facility, Ribbon has agreed to a prepayment of $75 million of the principal amount outstanding on the term loan A, and Ribbon intends to use the net proceeds from the private placement of series A preferred stock and warrants, together with cash on hand, to pay down borrowings under the credit facility.
In addition to acting as administrative agent, Citizens is also the swingline lender as well as a joint lead arranger and bookrunner with Santander Bank, NA.
Ribbon Communications is a Westford, Mass.-based security and software solutions company.
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