Open Text modifies terms under credit agreement for incurring debt

By Toni Weeks

San Luis Obispo, Calif., Dec. 20 - Open Text Corp. and some of its subsidiaries amended their credit agreement and security and pledge agreement on Dec. 16, according to an 8-K filed Friday with the Securities and Exchange Commission.

The amendment modifies the leverage ratio condition for incurring debt under a debt basket to a consolidated senior secured leverage ratio of less than 2.75 times, formerly 2.5 times, and replaces the income-based basket in the restricted payments negative covenant, formerly 50% of consolidated net income, with a basket of up to 35% of consolidated EBITDA.

Effectiveness of the amendment is subject to some conditions, including the completion of the acquisition of all outstanding equity interest of GXS Group, Inc.

The amendment was negotiated with Barclays Bank plc as administrative agent and collateral agent and Royal Bank of Canada as documentary credit lender.

Open Text is a Waterloo, Ont.-based provider of enterprise information management software that helps companies manage, secure and leverage their unstructured business information.

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