Switch lowers term loans, credit rates
Switch, Inc. announced that Switch, Ltd., along with some wholly owned subsidiaries, has repriced its credit facility and amended the applicable credit agreement.
The repricing has reduced the interest rate margins on its existing $600 million term loan facility by removing the pricing grid and providing for a single reduced interest rate margin, which is 0.50 percent lower than the previous applicable rate, and modified the pricing grid on its revolving credit facility to reduce interest rate margins by 0.50 percent at each grid level.
The interest rate reduction was made through an amendment to Switch, Ltd.’s credit agreement dated last June 27. The amendment also includes an obligation for Switch, Ltd. to pay a prepayment premium to the term loan lenders in the amount of 1 percent of the aggregate principal amount of the term loan in the event of another repricing on or before the six-month anniversary of the amendment.
The remaining terms of the credit agreement, as amended by the amendment, are substantially the same as the terms under the existing credit agreement, including with respect to events of default and loan acceleration.
The SaaS industry has been one of the fastest-growing tech sectors worldwide. And with revenue still streaming into cloud-based software despite the coronavirus pandemic, one could argue SaaS companies are positioned better than most to weather the COVID crisis, reports Kaleb M. Roedel.