Monotype Imaging replaces loans with $120 million five-year revolver

By Angela McDaniels

Tacoma, Wash., July 19 - Monotype Imaging Holdings Inc. and subsidiary Monotype Imaging Inc. entered into a new $120 million five-year secured revolving credit facility on July 13, according to an 8-K filing with the Securities and Exchange Commission.

There is a $20 million accordion feature.

The initial interest rate is Libor plus 225 basis points. The margin over Libor is 225 bps if the company's leverage ratio is less than 1.5 times and 250 bps if its leverage ratio is 1.5 times or more. The commitment fee is 37.5 bps.

Wells Fargo Capital Finance, LLC is the administrative agent.

Financial maintenance covenants include a maximum consolidated total debt-to-consolidated adjusted EBITDA ratio of 3 times and a minimum consolidated fixed charge coverage ratio of 1.25 times.

The new facility replaces the company's $140 million term loan and revolving credit facilities with Wells Fargo Foothill, Inc. that were due to expire on July 30, 2012. Monotype said the new facility provides more attractive interest rates and greater flexibility with respect to covenants governing permitted acquisitions and distributions.

At termination, the old facilities carried an outstanding balance of $57.24 million, which was paid with proceeds from the new revolver.

Monotype provides text imaging solutions and is based in Woburn, Mass.

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