MELVILLE, N.Y. –
November 5, 2018– Comtech Telecommunications Corp. (“Comtech”)
(NASDAQ:CMTL) announced today that it entered into a new $550.0 million
credit facility (the “Credit Facility”) with a syndicate of lenders on
October 31, 2018. The Credit Facility consists of a senior secured
revolving loan facility with a borrowing limit of $300.0 million and an
accordion feature allowing the Company to borrow up to an additional
$250.0 million, plus additional amounts subject to pro forma covenant
compliance. The Credit Facility will be used for general corporate
purposes, including supporting the Company’s growth strategies. The
Company’s prior credit facility was refinanced in full.
The new Credit Facility has a five-year term which expires in October
2023 and provides for, among other things:
- Significant increase in balance sheet flexibility;
- No scheduled payments of principal until maturity;
- Maximum Secured Leverage Ratio covenant of 3.75x, with no step downs;
- Minimum Interest Expense Coverage Ratio covenant of 3.25x;
-
Reduced interest rates of approximately 25 basis points as compared to
its prior facility based on the Company’s Secured Leverage Ratio as of
July 31, 2018; and -
Elimination or relaxation of many restrictive covenants in the
Company’s prior facility.
These and other changes are more fully described in the Company’s Form
8-K filed with the Securities and Exchange Commission (“SEC”) today.
Fred Kornberg, Chairman and Chief Executive Officer of Comtech, said,
“We are very pleased with our new Credit Facility which provides us
significantly better terms and enhanced balance sheet flexibility. We
thank our banking partners for supporting Comtech as we pursue our
long-term business strategies.”
As of July 31, 2018, the Company’s total debt outstanding under its
prior facility was $168.7 million, its Secured Leverage Ratio and
Leverage Ratio were 2.19x and its Interest Expense Coverage Ratio was
10.3x. Deferred financing costs of approximately $3.2 million, primarily
associated with the term loan portion of the Company’s prior facility,
will be expensed during the Company’s first quarter of fiscal 2019,
which ended October 31, 2018.
Comtech Telecommunications Corp. designs, develops, produces, and
markets innovative products, systems and services for advanced
communications solutions. The Company sells products to a diverse
customer base in the global commercial and government communications
markets.
Certain information in this press release contains statements that are
forward-looking in nature and involve certain significant risks and
uncertainties. Actual results could differ materially from such
forward-looking information. The Company’s SEC filings identify many
such risks and uncertainties. Any forward-looking information in this
press release is qualified in its entirety by the risks and
uncertainties described in such SEC filings.
PCMTL
View source version on businesswire.com: https://www.businesswire.com/news/home/20181105005716/en/
Media:
Michael D. Porcelain
Senior Vice President and
Chief Operating Officer
631-962-7000
[email protected]
