Synnex lifts term loan to $625 million, extends maturity, cuts pricing

By Marisa Wong

Madison, Wis., May 22 – Synnex Corp. entered into an amendment to its credit agreement dated Nov. 27, 2013 with Bank of America, NA as administrative agent to increase the term loan commitment to $625 million from $400 million, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also increases the amount of incremental commitments that Synnex can request for revolving loans or term loans by $225 million to $350 million.

The amendment extends the maturity date for revolving loans and the existing term loan to May 21, 2020.

Pricing was lowered to a range of Libor plus 150 basis points to Libor plus 225 bps, based on the company’s consolidated leverage ratio.

The amendment also modifies the quarterly amortization payment schedule for the term loan, which is now repayable in an amount equal to 1.25% of the initial principal amount for each of the first eight calendar quarters ending after the amendment date, 1.875% for each of the next four calendar quarters, 2.5% for each quarter ending after that and the outstanding principal amount on the May 2020 maturity date.

Under the amended credit agreement, Synnex is required to maintain a consolidated leverage ratio of 3.75 to 1, increased from 3.5 to 1.

The period through which the company is required to maintain a fixed-charge coverage ratio of not less than 1.20 to 1.0 has been extended through May 31, 2016. After that, the company must maintain a fixed-charge coverage ratio of not less than 1.25 to 1.0.

In addition, the amendment modifies event of default provisions so that a change-of-control event will only be triggered by the acquisition of a higher percentage of Synnex’s shares (from 30% to 40% of combined voting power of all equity interests on a fully diluted basis) and not by the composition of Synnex’s board of directors.

The increased term loan has been fully advanced and may be used to finance working capital, to make capital expenditures, for permitted acquisitions and for other corporate purposes.

Bank of America Merrill Lynch and Bank of Nova Scotia are joint lead arrangers and bookrunners, Bank of Nova Scotia is syndication agent and Bank of Tokyo Mitsubishi UFJ, Ltd., HSBC Bank USA, NA, Sumitomo Mitsui Banking Corp., BMO Harris Bank, NA and Wells Fargo Bank, NA are documentation agents.

Synnex is a Fremont, Calif.-based information technology business process services company.

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