Ribbon Communications has secured $385 million in new funding comprised of a $350 million term loan and a $35 million revolving credit facility that its CFO says puts it on a new expansion path.
"We are pleased to complete this important milestone for the Company that provides us with the right capital structure as we look to grow the business profitably," said Mick Lopez, CFO of Ribbon Communications.
Proceeds from the term loan under the 2024 Credit Facility will be used to refinance the prior credit facility, redeem Ribbon's outstanding Series A Preferred Stock, and pay fees, costs, and expenses related to the 2024 Credit Facility. Excess proceeds from the term loan will be used for working capital and other general corporate purposes.
Loans under the 2024 Credit Facility will mature on June 21, 2029. The loans will initially bear annual interest equal to SOFR plus 6.25%. When Ribbon delivers its financial statements for the fiscal year ended December 31, 2024, the interest rate will be SOFR plus a margin of 5.75% to 6.25%, depending on the company's consolidated net leverage.
Ribbon can calculate interest using an alternative base rate plus a margin ranging from 4.75% to 5.25%. Outstanding amounts under the 2024 Credit Facility are secured by substantially all the assets of Ribbon and certain of Ribbon's subsidiaries.
HPS Investment Partners, LLC will serve as Administrative Agent under the 2024 Credit Facility, and HPS Investment Partners, LLC and WhiteHorse Capital will serve as joint lead arrangers and bookrunners.
In connection with the closing of the 2024 Credit Facility, Ribbon also issued a notice of redemption in full of its Series A Preferred Stock. Under the redemption terms, the Series A Preferred Stock will be redeemed on June 25, 2024.
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