Progress Software obtains $123.75 million loan, $150 million revolver

By Tali Rackner

Minneapolis, Nov. 28 – Progress Software Corp. entered into a $273.75 million five-year credit agreement via administrative agent JPMorgan Chase Bank, NA on Nov. 20, according to an 8-K filing with the Securities and Exchange Commission.

The agreement provides for a $123.75 million secured term loan and a $150 million secured revolving credit facility, which may be made available in dollars and certain other currencies. The revolver has a $125 million accordion feature.

There is an up to $25 million swingline loan sublimit and an up to $25 million sublimit for letters of credit.

Initial interest is Libor plus 150 basis points with a 25 bps commitment fee. After that, the interest will be Libor plus 150 bps to 200 bps, based on Progress’ leverage ratio.

The commitment fee ranges from 25 bps to 35 bps, also based on leverage.

The credit agreement contains certain financial covenants that require the company to maintain a maximum consolidated senior secured leverage ratio of 2.75 times, provided that following an acquisition, the maximum would increase to 3 times for three quarters and then revert back to 2.75 times.

Progress must also keep a maximum consolidated total leverage ratio of 3.75 times, provided that following an acquisition, the maximum would increase to 4 times for three quarters and then revert back to 3.75 times.

Finally, the company is required to keep a minimum consolidated fixed-charge coverage ratio of 3 times.

The credit facility matures on Nov. 20, 2022. The term loan requires repayment of principal at the end of each fiscal quarter, beginning with the fiscal quarter ending Feb. 28, 2018. The first eight payments are for $1.55 million each, the following four payments are in the amount of $2.32 million each, the following four payments are in the amount of $3.09 million each, the following three payments are in the amount of $3.87 million each and the last payment is the remaining principal amount. The revolving credit facility does not require amortization of principal. The term loan may be prepaid in whole or in part without penalty or premium.

This new credit facility replaces Progress’ existing unsecured revolving credit facility dated Dec. 2, 2014, which was terminated.

The term loan was used to partially fund Progress’ acquisition of Telerik AD. Proceeds from the revolver will be used for general corporate purposes, including acquisitions of other businesses, and working capital.

JPMorgan is the bookrunner and lead arranger; Wells Fargo Bank, NA and Citizens Bank, NA are co-syndication agents; and Bank of America, NA, Citibank, NA, Silicon Valley Bank and Santander Bank, NA are co-documentation agents.

Progress Software provides application infrastructure software for the development, deployment, integration and management of business applications. The company is located in Bedford, Mass.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.