Convergys gets replacement term loan, revolver totaling $515 million

By Marisa Wong

Morgantown, W.Va., Jan. 13 – Convergys Corp. entered into a credit agreement on Wednesday for a $215 million term loan and a $300 million revolving credit facility, according to an 8-K filed Friday with the Securities and Exchange Commission.

On the effective date, the company incurred $100 million of initial term loan borrowings.

The new credit agreement replaces the company’s existing credit agreement that consisted of a $300 million revolver and a $350 million term loan that had about $215 million of term loan borrowings remaining outstanding as of Sept. 30. The prior credit agreement was scheduled to mature in March 2019. Upon closing of the new credit agreement, the outstanding borrowings were repaid in full, and the old credit agreement was terminated.

Aggregate borrowing capacity under the new facility may be increased by up to an additional $250 million by increasing the amount of the revolver or by incurring additional term loans.

The term loan and the revolver each mature on Jan. 11, 2022. The revolver has two one-year extension options.

Borrowings bear interest at Libor plus a spread based on the company’s total net leverage ratio. The spread ranges from 150 basis points to 225 bps and will initially be 150 bps.

The company is also obligated to pay a commitment fee ranging from 25 bps to 40 bps, depending on its total net leverage ratio. The fee will initially be 25 bps.

Citigroup Global Markets Inc. and Bank of America Merrill Lynch are joint lead arrangers and joint bookrunners with Citibank, NA as administrative agent, Bank of America, NA as syndication agent and PNC Bank, NA, MUFG, U.S. Bank NA and Wells Fargo Bank, NA as co-documentation agents.

Cincinnati-based Convergys is a customer management services provider.

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