Mercury Systems obtains $200 million term loan, $100 million revolver

By Marisa Wong

Morgantown, W.Va., May 2 – Mercury Systems, Inc. entered into a credit agreement on Monday for a $200 million term loan facility and a $100 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch, Citibank, NA, Keybanc Capital Markets Inc. and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers and joint bookrunners. Bank of America, NA is the administrative agent.

Each facility has a five-year maturity.

Borrowings bear interest at Libor plus an applicable margin initially set at 200 basis points. In future fiscal quarters, pricing will be based on the company’s total net leverage ratio, and the applicable margin will range from 200 bps to 300 bps.

The company will also pay a quarterly commitment fee initially set at 30 bps. In future quarters, the commitment fee will range from 30 bps to 50 bps, depending on the company’s total net leverage ratio.

The credit agreement provides for quarterly amortization payments on the term loans, beginning at a rate of 5% per year and increasing to 12.5% per year over the five-year term.

The company is required to make mandatory prepayments of the term loans with proceeds from asset sales or and debt issuances.

In addition, the credit agreement requires the company to comply with financial covenants, including a quarterly minimum consolidated cash interest charge ratio test and a quarterly maximum consolidated total net leverage ratio test.

Mercury is a Chelmsford, Mass.-based commercial provider of secure processing subsystems.

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