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J.P. Morgan Securities, Wells Fargo Arrange $600MM Facility to Riverbed Technology

December 27, 2013, 08:02 AM
Filed Under: Technology

On December 20, 2013, Riverbed Technology, Inc. entered into a credit agreement and related security and other agreements for a $600 million credit facility providing for a $300 million senior secured term loan facility and a $300 million senior secured revolving loan facility (together, the “Senior Credit Facility”) with certain lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Wells Fargo Bank, National Association, as syndication agent, HSBC Bank USA, N.A., as documentation agent, and J.P. Morgan Securities LLC and Wells Fargo Securities LLC, as joint lead arrangers and joint bookrunners.

Also on December 20, 2013, Riverbed drew down $300 million in term loans and $225 million in revolving loans under the Senior Credit Facility. The proceeds were used to refinance all obligations under the credit agreement, dated as of December 18, 2012, among Riverbed, certain lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, Goldman Sachs Bank USA, as syndication agent, Morgan Stanley & Co. LLC, as collateral agent, Bank of America, N.A., as documentation agent, Morgan Stanley Senior Funding, Inc. and Goldman Sachs Bank USA as joint lead arrangers and joint bookrunners, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as arranger, together with all related security and other agreements (the “Prior Senior Credit Facility”), and to pay fees and expenses related to the refinancing.

The credit agreement governing the Senior Credit Facility permits Riverbed to from time to time increase term loan or revolving loan commitments under the Senior Credit Facility and/or request the establishment of one or more new term loan facilities in an aggregate amount not to exceed $150,000,000, plus additional amounts subject to compliance on a pro forma basis with a secured leverage ratio of 2.75:1.00. The availability of such additional capacity is subject to, among other things, the absence of any default under the credit agreement governing the Senior Credit Facility and receipt of commitments from existing lenders or other financial institutions.

Interest Rate and Fees. Borrowings under the Senior Credit Facility bear interest at a rate per annum equal to an applicable margin plus, at Riverbed’s option, either: (i) a base rate determined by reference to the highest of: (a) a rate of interest publicly announced by JPMorgan Chase Bank, N.A. as its prime rate; (b) 1/2 of 1% per annum above the federal funds effective rate; and (c) the LIBOR rate for an interest period of one month plus 1.00%; or (ii) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing adjusted for certain reserve requirements. The applicable margin for borrowings will be determined based on Riverbed’s leverage ratio, and is initially 0.75% with respect to base rate borrowings and 1.75% with respect to LIBOR borrowings. Riverbed is also obligated to pay other customary closing fees, arrangement fees, commitment fees, administration fees and letter of credit fees for a credit facility of this size and type.

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