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Bank of America, Others Provide $250MM to Stratasys

Date: Nov 11, 2013 @ 07:29 AM
Filed Under: Technology

On November 7, Stratasys Ltd., and Stratasys International Ltd., a wholly owned subsidiary of the company, entered into a credit agreement with Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the lenders party thereto (collectively, the “Lenders”). Under the Credit Agreement, Citibank, N.A. and HSBC Bank USA, National Association, are Co-Syndication Agents and Silicon Valley Bank is Documentation Agent.

The Credit Agreement provides for a five year revolving credit facility in an aggregate principal amount of up to $250 million. The Revolving Credit Facility permits swing line loans of up to $25 million. The Borrower has the right to make up to three requests to increase the aggregate commitments under the Revolving Credit Facility by an aggregate amount for all such requests of up to $75 million, provided that, in each case, the Lenders (including new lenders who are eligible assignees under the Credit Agreement) are willing to provide such new or increased commitments and certain other conditions are met.

All of the obligations under the Credit Agreement are unconditionally guaranteed by the Company and the Company’s and Borrower’s active U.S. and Israeli subsidiaries (excluding, through the end of 2014, Baccio Corporation (formerly known as Cooperation Technology Corporation, or MakerBot) and its subsidiaries, which were acquired pursuant to the Company’s acquisition of MakerBot).

At the Borrower’s option, revolving loans under the Credit Agreement (other than swing line loans) will accrue interest based on either (i) the Eurodollar Rate (the London Interbank Offered Rate, or LIBOR) plus a margin based on the Company’s Consolidated Leverage Ratio (defined as consolidated funded indebtedness over consolidated EBITDA (as defined in the Credit Agreement) for the previous rolling four quarters (the “Leverage Ratio”); or (ii) a base rate of (a) the federal funds rate plus a margin, (b) BofA’s announced prime rate, or (c) the Eurodollar Rate plus a margin, whichever is highest, plus a margin based on the Leverage Ratio (the “Base Rate”). Swing line loans will accrue interest at the Base Rate plus the then applicable margin for Base Rate loans.

Borrowings under the Credit Agreement are available for general corporate purposes and for other permitted purposes set forth in the Credit Agreement.

The Borrower must also pay a commitment fee on the unused portion of the Revolving Credit Facility at a rate based on the Leverage Ratio. The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants. The negative covenants include, without limitation, restrictions on indebtedness, liens, investments, and certain dispositions. The negative covenants are each subject to a number of specific exceptions, as well as broader exceptions which are a function of the Company’s consolidated financial status. These broader exceptions include, among other things, the ability of the Company, the Borrower, or any of their subsidiaries to make Investments, consummate Acquisitions (as such terms are defined in the Credit Agreement), and incur additional unsecured indebtedness in the form of convertible unsecured bonds or similar convertible securities, as long as certain Leverage Ratio and other conditions are met.

The Company and the Borrower have also agreed to maintain certain financial covenants including: (i) a maximum Leverage Ratio; (ii) a minimum consolidated fixed charge coverage ratio; and (iii) minimum consolidated EBITDA.

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