Applied Optoelectronics, Inc. entered into a three year, $50 million, revolving line of credit with Branch Banking and Trust Company (BB&T). Borrowings under the Credit Facility will be used for general corporate purposes, according to a regulatory fiing.
The Company will make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid.
The Company’s obligations under the Credit Facility will be secured by the Company’s accounts receivable, inventory, intellectual property, all business assets with the exception of real estate and equipment. Borrowings under the Credit Facility will bear interest at a rate equal to the one-month London Interbank Offered Rate (LIBOR) plus 1.50%.
The Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties, and events of default applicable to the Company that are customary for agreements of this type.
On September 28, 2017, the Company terminated its First Amendment to Credit Agreement and Limited Consent, with East West Bank and Comerica Bank (individually referred to as the "Lender" and collectively as the “Lenders”); the Company also terminated, with each Lender, its $17.5 million Amended and Restated Revolving Credit Note, its $2.5 million Amended and Restated Revolving Credit Note, its $5 million Term Note, and First Modification to Promissory Note, all dated June 24, 2016, (the “Revolving Credit Notes”). The Revolving Credit Notes amends and restates in-part the Company’s existing credit facility with the Lenders that were originally entered into on June 30, 2015.
The Company also repaid the outstanding balance and terminated its Change in Terms Agreement and Notice of Final Agreement and Second Modification to the Construction Loan Agreement with East West Bank, dated October 5, 2016, (the “Construction Loan”). The Construction Loan amended and restated the Company’s Promissory Note and Construction Loan Agreement executed with East West Bank on January 26, 2015, with a subsequent amendment occurring on June 14, 2016.
Termination of the Construction Loan and Revolving Credit Notes results in the termination of (i) a $17.5 million revolving credit note with East West Bank, (ii) a $2.5 million revolving credit note with East West Bank, (iii) a $5 million term note with East West Bank, (iv) a $17.5 million revolving credit note with Comerica Bank, (v) a $2.5 million revolving credit note with Comerica Bank, (vi) a $5 million term note with Comerica Bank, and (vii) a $22 million construction loan with East West Bank.
Upon repayment and/or termination of the Revolving Credit Notes and Construction Loan the Company has no further obligations with either Lender.