Summary
Lam Research Corporation (LRCX) announced on March 7, 2008, that it has entered into a new $250 million Credit Agreement, dated March 3, 2008. This new facility is intended for general corporate purposes and was fully drawn at the time of execution. As a condition of this new credit, the company fully repaid and terminated its previous $350 million credit agreement that was in place with Lam Research International SARL. The new credit agreement is secured by a significant portion of the company's and its subsidiary Bullen Semiconductor Corporation's assets, including accounts receivables, inventory, equipment, and ownership interests in subsidiaries. The agreement also includes customary covenants, such as leverage ratios and liquidity requirements, and provides flexibility for the company to prepay the loan without penalty. This move suggests a refinancing effort to potentially improve terms or manage debt structure.
Key Highlights
- 1Lam Research secured a new $250 million credit facility to fund general corporate purposes.
- 2The new credit agreement is dated March 3, 2008, with ABN AMRO BANK N.V. acting as the administrative agent.
- 3A subsidiary, Bullen Semiconductor Corporation, has provided a guarantee for the company's obligations under the new credit agreement.
- 4The company's obligations under the new credit facility are secured by a pledge of various assets, including receivables, inventory, equipment, and equity in subsidiaries.
- 5The $350 million credit agreement dated June 16, 2006, with Lam Research International SARL was fully repaid and terminated concurrently.
- 6The new loan is a non-revolving term loan with specific repayment dates leading up to March 6, 2010.
- 7Interest on the new loan is based on LIBOR plus a margin or the Agent's prime rate.