Summary
Teradyne, Inc. (TER) reported on April 27, 2015, the execution of a new five-year senior secured revolving credit facility totaling $350 million, with an option to increase commitments by an additional $150 million. This facility, arranged with Barclays Bank PLC, is intended to support general corporate purposes and working capital. As of the filing date, no funds had been drawn under the facility. The credit agreement includes provisions for variable interest rates based on the company's leverage ratio, ranging from prime rate plus a margin of 0.00% to 1.00% or LIBOR plus a margin of 1.00% to 2.00%. The company also faces commitment fees on the unused portion of the facility. Covenants within the agreement restrict certain actions, such as asset sales and incurring additional secured debt, and require the maintenance of specific financial ratios. The facility is secured by company assets and guarantees from certain domestic subsidiaries, along with a pledge of 65% of the capital stock of certain foreign subsidiaries.
Key Highlights
- 1Teradyne entered into a new 5-year, $350 million senior secured revolving credit facility on April 27, 2015.
- 2The facility provides flexibility for potential incremental commitments of up to $150 million.
- 3Proceeds are designated for general corporate purposes and working capital.
- 4Interest rates are variable, based on the company's Consolidated Leverage Ratio, with options for base rate or LIBOR plus specified margins.
- 5Commitment fees will be charged on the unused portion of the credit facility.
- 6The credit agreement contains customary financial covenants (Leverage Ratio, Interest Coverage Ratio) and operational restrictions.
- 7The facility is secured by company assets and certain subsidiary guarantees.