Akamai enters into $500 million five-year revolving credit agreement

By Sarah Lizee

Olympia, Wash., May 15 – Akamai Technologies, Inc. entered into a $500 million five-year revolving credit agreement on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement provides for an initial $500 million in revolving loans. The facility can be increased to up to $1 billion under some circumstances.

Borrowings bear interest at Libor plus a margin that ranges from 87.5 basis points to 125 bps, and the commitment fee ranges from 7.5 bps to 15 bps, in each case depending on the leverage ratio. Interest is initially Libor plus 100 bps, and the commitment fee is initially 10 bps.

Borrowings may be used to finance working capital needs and for general corporate purposes.

Principal covenants include a maximum consolidated leverage ratio of 3.5 to 1, with a step-up in the event of some acquisitions, and a minimum consolidated interest coverage ratio of 3 to 1, provided that the net cash proceeds from Akamai’s first issuance of senior unsecured debt after May 10, if any, will be excluded from the leverage ratio calculations until those proceeds have been used.

JPMorgan Chase Bank, NA is the bookrunner and a joint lead arranger together with Morgan Stanley Senior Funding, Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., HSBC Bank USA, NA, Toronto-Dominion Bank, New York Branch and Sumitomo Mitsui Banking Corp.

JPMorgan Chase is the administrative agent, and Morgan Stanley is the syndication agent.

Bank of America, NA, HSBC Bank, Toronto-Dominion Bank and Sumitomo Mitsui are co-documentation agents.

Cambridge, Mass.-based Akamai is an internet company that provides content delivery and cloud infrastructure services.

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