Symantec gets $1 billion three-year term loan, $1 billion revolver

By Angela McDaniels

Tacoma, Wash., May 13 – Symantec Corp. entered into a credit agreement on Tuesday that provides for a $1 billion three-year term loan and a $1 billion five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The maturity date is May 10, 2019 for the term loan and May 10, 2021 for the revolver.

The credit agreement has a $500 million accordion feature that may be used to increase availability under the revolver or the term loan.

Up to $20 million of the revolver may be drawn in the form of short-term swingline loans.

The interest rate is Libor plus a margin that depends on the company’s debt ratings.

The company may prepay loans under the credit agreement at any time at its option without penalty.

The credit agreement contains a covenant that the company maintain a ratio of debt to adjusted EBITDA of not more than 4.5 to 1 through the first fiscal quarter of fiscal year 2018, then 4 to 1 through the third fiscal quarter of fiscal year 2018 and 3.5 to 1 thereafter.

Wells Fargo Bank, NA is the administrative agent. Bank of America, NA, Citibank, NA and JPMorgan Chase Bank, NA are the co-syndication agents. Barclays Bank plc, HSBC Bank USA, NA, Mizuho Bank, Ltd., Morgan Stanley Bank, NA, Sumitomo Mitsui Banking Corp. and MUFG are the co-documentation agents. Wells Fargo Securities, LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc. and JPMorgan are the joint bookrunners and joint lead arrangers.

At the closing, the company did not borrow any funds under the revolver and borrowed the entire $1 billion term loan to be used for its capital return program and for general corporate purposes.

The new credit agreement replaces the company’s prior $1 million revolver, which was terminated on Tuesday. There were no borrowings outstanding under the revolver at termination.

The company also announced a fiscal 2017 restructuring plan under which it expects to reduce net global headcount by about 10% and to close some facilities. The company expects the plan to result in an estimated annual total reduction in spending of $400 million.

Symantec is a Mountain View, Calif.-based provider of security, storage and systems management solutions.

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