Nuvera Communications closes $130 million term loans, revolver

By Marisa Wong

Los Angeles, July 20 – Nuvera Communications, Inc. entered into a credit agreement and closed a senior secured credit facility in the aggregate principal amount of $130 million on July 15, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility consists of a $50 million initial term loan, a $50 million delayed-draw term loan and a $30 million revolving credit facility.

CoBank, ACB acted as lender and is acting as administrative agent for the consortium of lenders.

The $50 million initial term loan was drawn in a single advance on the closing date. Proceeds were used to pay off the existing credit facilities under the second amended and restated master loan agreement dated July 31, 2018.

The delayed-draw term loan may be drawn in no more than five advances, in minimum amounts of $1 million during the period ending on the earlier of July 15, 2025 or the date the delayed-draw term loan is drawn in full.

The term loans will mature on July 15, 2029.

Principal amounts outstanding on the term loans will be due and payable quarterly in equal installments on the last day of each calendar quarter, with the balance due at maturity. Annual amortization is 0% for the first three years, 5% for years four through six and 7.5% for year seven.

The revolver is available until July 15, 2027. Revolving borrowings will be used for capital expenditures and other general corporate purposes.

The credit facility enables the company from time to time to add an incremental term loan facility or facilities of up to $30 million, in minimum amounts of $5 million per incremental term loan.

Under the credit facility, as under the prior loan agreement, Nuvera has the ability to enter into interest rate swaps in connection with amounts borrowed from CoBank. In connection with the new facility, Nuvera rolled over its two existing interest rate swap agreements.

Borrowings will bear interest based on term SOFR plus an applicable margin that varies based on total leverage ratio.

The applicable margin for revolving loans ranges from 165 basis points to 290 bps. The company is required to pay a commitment fee for the unused portion of the revolver that will range from 20 bps to 30 bps.

The applicable margin for term loans ranges f rom 190 bps to 315 bps. The company is also required to pay a commitment fee for the unused portion of the delayed-draw term loan, which will range from 20 bps to 30 bps until the second anniversary of the closing date, depending on the total leverage ratio, and 75 bps after the second anniversary of the closing date.

The company may be required to make mandatory prepayments in the event of a disposition of some property or assets, upon receiving insurance or condemnation proceeds, upon the issuance of some debt or equity securities or upon the incurrence of debt for borrowed money.

The obligations of Nuvera as borrower are guaranteed by Nuvera subsidiaries Peoples Telephone Co., Western Telephone Co., Hutchinson Telephone Co., Hutchinson Telecommunications, Inc., Hutchinson Cellular, Inc., Tech Trends, Inc., Sleepy Eye Telephone Co. and Scott-Rice Telephone Co.

The communications company is based in New Ulm, Minn.

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