Qorvo enters $300 million revolver, $400 million delayed-draw term loan

By Marisa Wong

Morgantown, W.Va., Dec. 6 – Qorvo, Inc. entered into a $700 million five-year unsecured senior credit facility on Dec. 5, according to an 8-K filing with the Securities and Exchange Commission.

Merrill Lynch, Pierce, Fenner & Smith Inc. and Wells Fargo Securities, LLC are the joint lead arrangers and bookrunners. Bank of America, NA is administrative agent, swingline lender and letter-of-credit issuer. Wells Fargo Bank, NA, TD Bank, NA, MUFG, PNC Bank, NA and Bank of the West are co-syndication agents.

The credit facility consists of a $300 million senior revolving line of credit and a $400 million senior delayed-draw term loan, $100 million of which was funded at closing. The remainder of the term loan is available in up to two advances within six months after the closing date.

Up to $25 million of the revolver may be used for the issuance of standby letters of credit, and up to $10 million may be used for swingline advances.

The company may request at any time that the facility be increased by up to $300 million.

Loans will bear interest at Libor plus an applicable rate ranging from 112.5 basis points to 137.5 bps, depending on the company’s consolidated leverage ratio. Interest will initially be Libor plus 125 bps.

Undrawn amounts under the revolver and term loan are subject to a commitment fee ranging from 15 bps to 25 bps.

The credit agreement contains financial covenants requiring the company to maintain: (a) A maximum consolidated leverage ratio of 3 times as of the end of any fiscal quarter, provided that in connection with a permitted acquisition in excess of $300 million, the maximum consolidated leverage ratio may increase on two occasions during the term of the facility to 3.5 times for four consecutive fiscal quarters, beginning with the fiscal quarter in which that acquisition occurs; and (b) a minimum interest coverage ratio of 3 times as of the end of any fiscal quarter.

The credit facility is available to finance working capital, capital expenditures and other corporate purposes.

In connection with the new credit agreement, the company terminated its credit agreement dated April 7, 2015.

Qorvo provides core technologies and RF solutions for mobile, infrastructure and aerospace/defense applications.

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