Progress Software closes $401 million replacement term loan, revolver

By Marisa Wong

Morgantown, W.Va., May 1 – Progress Software Corp. entered into a second amended and restated credit agreement on April 30 for a $301 million secured term loan and a $100 million secured revolver, which may be made available in dollars and some other currencies, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA is the bookrunner, lead arranger and administrative agent, with Wells Fargo Bank, NA and Citizens Bank, N.A as syndication agents, Bank of America, NA, Citibank, NA, Silicon Valley Bank, Santander Bank, NA and TD Bank, NA as documentation agents.

The new credit facility replaces Progress’ existing secured credit facility dated Nov. 20, 2017 with JPMorgan as administrative agent. The existing credit facility was set to mature on Nov. 20, 2022. There were no revolving loans and $116 million of term loans outstanding at the time of termination.

The outstanding term loan was incorporated into the amended and restated credit facility.

The new term loan was used to partially fund Progress’ acquisition of Ipswitch, Inc.

The new revolver may be increased by up to an additional $125 million and has a $25 million sublimit for swingline loans and a $25 million sublimit for the issuance of standby letters of credit.

Progress expects to use the revolver for general corporate purposes, which may include the acquisitions of other businesses, and may also use it for working capital.

The term loan and revolver will bear interest at Libor plus 150 basis points to 200 bps, based on the company’s leverage ratio.

The commitment fee on the undrawn portion of the revolver ranges from 25 bps to 35 bps, also based on the leverage ratio.

At closing, the applicable margin was 162.5 bps, and the commitment fee was 30 bps.

The credit facility matures on April 30, 2024.

The term loan requires repayment of principal at the end of each fiscal quarter, beginning with the fiscal quarter ending Aug. 31. The first four payments are for $1.88 million each, the following four for $3.76 million each; the next four for $5.64 million each, the four after that for $7.52 million each, the following three for $9.41 million each and the last payment for the remaining balance.

The credit agreement requires Progress to maintain compliance with a consolidated fixed-charge coverage ratio, a consolidated leverage ratio and a consolidated senior secured leverage ratio.

Progress is a Bedford, Mass.-based provider of application development and digital experience technologies.

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