Microchip expands commitments by $204 million, amends leverage ratio

By Wendy Van Sickle

Columbus, Ohio, Dec. 7 – Microchip Technology Inc. used a portion of its option to expand revolving commitments under and adjusted a financial covenant of its credit agreement on Friday, according to an 8-K filed with the Securities and Exchange Commission.

The company expanded the commitments under the facility’s 2020 dollar tranche and the 2020 multicurrency tranche by a total of $204 million.

Following the amendment, the company has the option to expand the facility by up to an additional $45,437,500.

Microchip Technology also amended its total leverage ratio covenant to permit the company, at its option in connection with certain acquisitions, to increase the maximum ratio to 5 times for a period of four consecutive fiscal quarters, with a step-down to 4.75 times for a period of three consecutive quarters.

The credit agreement is originally dated June 27, 2013 with JPMorgan Chase Bank, NA as administrative agent.

Microchip is a Chandler, Ariz.-based provider of microcontroller, mixed-signal, analog and Flash-IP solutions.

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