Hughes Telematics gets $5 million second-lien loan add-on, amends first-lien credit facility

By Sara Rosenberg

New York, Feb. 8 - Hughes Telematics Inc. closed on a $5 million incremental second-lien loan and amended its existing first-lien credit facility to waive the requirement that 25% of net cash proceeds from a private placement be used to repay senior secured term debt, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Pricing on the incremental second-lien loan is 9% PIK, and Plase HT LLC is the administrative agent on the deal.

In connection with getting the incremental debt, the company amended its existing second-lien loan to provide that, in the event of certain defaults, notice from either the majority of all lenders or a majority of the incremental loan lenders is required for the agent to enforce the lenders' claims against the company.

Regarding the first-lien credit facility amendment, that was done as the company completed a private placement of roughly 1.4 million shares of its common stock for about $5 million.

As a result of the amendment waiving the loan paydown, proceeds from the private placement will be used for general corporate purposes.

Morgan Stanley is the administrative agent on the first-lien loan.

Hughes Telematics is an Atlanta-based provider of next generation connected services.

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