Zebra restructuring includes $687.5 million term A, doubled revolver

By Wendy Van Sickle

Columbus, Ohio, July 26 – Zebra Technologies Corp. closed its comprehensive debt restructuring, which included an upsized $500 million revolving credit facility and a new $687.5 million senior secured term loan A, in addition to its repriced and reduced $1,338,000,000 senior secured covenant-light term loan B, according to a press release.

The revolver, which was increased from $250 million previously, and the term loan A are due in July 2021 and are initially priced at Libor plus 200 basis points. Interest may be lowered upon achievement of certain debt leverage levels.

A total of $105 million was drawn on the revolver at closing. Proceeds of the revolver and term A loan will primarily be used to redeem $750 million of the company’s 7¼% senior notes due October 2022 next month.

As previously reported, the term B loan is due Oct. 27, 2021 and is priced at Libor plus 200 bps, the low end of the Libor plus 200 bps to 225 bps talk.

It has a 0.75% Libor floor, a par issue price, 101 soft call protection for six months and amortization of 1% per annum.

Morgan Stanley Senior Funding Inc. is the lead bank on the deal.

The previous term loan B due 2021 was priced at Libor plus 250 bps with a 0.75% Libor floor.

“We are taking advantage of a favorable credit market to reduce our cost of capital and drive shareholder value,” Zebra’s chief financial officer, Olivier Leonetti, said in the release.

“This comprehensive debt restructuring reduces our weighted average pre-tax interest rate on approximately $2.5 billion total debt outstanding by approximately 2 percentage points to below 4%, and drives more than $45 million of annual cash interest savings. Zebra's capital structure allows payment flexibility as we continue to delever our balance sheet.”

Zebra is a Lincolnshire, Ill.-based provider of marking and printing technologies.

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