Business
8x8, Inc. Secures $200 Million Term Loan at Reduced Interest Rate
Proceeds to Fund Prepayment of Outstanding Balances Under Existing Term Loan Maturing August 2027 CAMPBELL, Calif.--(BUSINESS WIRE)-- 8x8, Inc. (NASDAQ:
About this update from 8x8 Inc
[{"type":"text","content":"\nProceeds to Fund Prepayment of Outstanding Balances Under Existing Term Loan Maturing August 2027\n\n\n CAMPBELL, Calif.--(BUSINESS WIRE)--\n8x8, Inc. (NASDAQ: EGHT) (the “Company” or “8x8”), a leading integrated cloud contact center and unified communications platform provider, today announced that it has secured a new $200 million Delayed Draw Term Loan Credit Facility (the “Delayed Draw Term Loan” or “Credit Agreement”). The Company intends to use the proceeds from the Delayed Draw Term Loan plus $25 million from existing cash balances to fund the prepayment of the entire $225 million outstanding under the Company’s existing Term Loan maturing August 3, 2027.\n\n\nThe Company expects the initial interest rate of the new Delayed Draw Term Loan to be the Secured Overnight Financing Rate (SOFR) plus 3.00%, approximately 3.6 percentage points lower than its existing Term Loan. The lower interest rate, combined with the lower principal outstanding on the new Delayed Draw Term Loan, is expected to result in significant cash interest expense savings for the duration of the term loan. The terms of the Delayed Draw Term Loan also allow for stock repurchases, subject to certain conditions and limitations.\n\n\n\"As 8x8’s financial strength continues to grow, we are pleased to announce we have secured a $200 million Delayed Draw Term Loan at a significantly reduced interest rate compared to the rate on our existing Term Loan,” said Kevin Kraus, Chief Financial Officer at 8x8, Inc. “This achievement not only reflects the confidence our lenders have in our business strategy and performance but also positions us to further enhance our financial flexibility and support our long-term growth objectives.\"\n\n\nDelayed Draw Term Loan Details\n\n\nThe initial funding of loans under the Credit Agreement is expected to occur in August, 2024, subject to customary closing conditions.\n\n\nLoans made under the Delayed Draw Term Loan will bear interest at an annual rate equal to the applicable SOFR, plus a margin of 2.50% to 3.00%, based on the consolidated total net leverage ratio of the Company and its subsidiaries. The new Delayed Draw Term Loan will mature on August 15, 2027. In addition to scheduled principal payments, the Company, at its election, may make early repayments without penalty at any time prior to maturity.\n\n\nLoans under the Cr...