UBIQUITI NETWORKS, INC. (NASDAQ:UBNT) Files An 8-K Entry into a Material Definitive Agreement

The disclosures set forth in Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.

The disclosures set forth in Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.

On January 17, 2018, Ubiquiti Networks, Inc. (the “Company”) and Ubiquiti International Holding Company Limited, a wholly-owned subsidiary of the Company organized under the laws of the Cayman Islands (the “Cayman Borrower” and, together with the Company, the “Borrowers”), entered into an amended and restated credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), the other financial institutions named as lenders therein, and Wells Fargo as administrative agent for the lenders,that provides for a $400 million senior secured revolving credit facility and a $500 million senior secured term loan facility (collectively, the “Facilities”), with an option to request increases in the amounts of such credit facilities by up to an additional $300 million in the aggregate (any such increase to be in each lender’s sole discretion).

The revolving credit facility includes a sub-limit of $10 million for letters of credit and a sub-limit of $25 million for swingline loans. The Facilities replace the Company’s existing $425million senior secured revolving credit facility and $100 million senior secured term loan facility (collectively, the “Existing Facility”) under the credit agreement dated as of March 3, 2015, as amended, among the Borrowers, the lenders party thereto and Wells Fargo, as administrative agent for the lenders, which has been terminated in connection with the new Facilities. The Facilities are available for working capital and general corporate purposes that comply with the terms of the Credit Agreement, including to finance the repurchase of the Company's common stock or to make dividends to the holders of the Company's common stock. Under the Credit Agreement, revolving loans and swingline loans may be borrowed, repaid and reborrowed until January 17, 2023, at which time all amounts borrowed must be repaid. The term loan facility was drawn in full at closing, with a portion thereof used to refinance the Existing Facility, and matures on January 17, 2023. The term loan is payable in quarterly installments of 1.25% of the original principal amount of the term loan until December 31, 2019, thereafter increasing to 1.875% until December 31, 2020, and thereafter increasing to 2.5% of the original principal amount of the term loan. Revolving, swingline and term loans may be prepaid at any time without penalty. Revolving and term loans bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or replacement rate) for a specified period, plus a margin of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Swingline loans bear interest at a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Base rate is defined as the greatest of (A) Wells Fargo’s prime rate, (B) the federal funds rate plus 0.50% or (C) the applicable LIBOR rate (or replacement rate) for a period of one month plus 1.00%. A default interest rate shall apply on all obligations during certain events of default under the Credit Agreement at a rate per annum equal to 2.00% above the applicable interest rate. The Company will pay to each lender a facility fee on a quarterly basis based on the unused amount of each lender’s commitment to make revolving loans, of between 0.20% and 0.35%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. The Company will also pay to the applicable lenders on a quarterly basis certain fees based on the daily amount available to be drawn under each outstanding letter of credit, including aggregate letter of credit commissions of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter, and issuance fees of 0.125% per annum. The Company is also obligated to pay Wells Fargo, as agent, fees customary for a credit facility of this size and type.

The Credit Agreement requires the Company to maintain during the term of the Facilities (i) a maximum consolidated total leverage ratio of 3.25 to 1.00 and (ii) minimum liquidity of $250 million, which can be satisfied with unrestricted cash and cash equivalents and up to $50 million of availability under the revolving credit facility. In addition, the Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens or enter into agreements restricting their ability to grant liens on property, enter into mergers, dispose of assets, change their accounting or reporting policies, change their business and incur indebtedness, in each case subject to customary exceptions for a credit facility of this size and type. The Credit Agreement includes customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement.

The obligations of the Company and certain domestic subsidiaries under the Credit Agreement are required to be guaranteed by such domestic subsidiaries (the “Domestic Guarantors”) and are collateralized by substantially all assets (excluding intellectual property) of the Company and the Domestic Guarantors. The obligations of the Cayman Borrower and certain foreign subsidiaries under the Credit Agreement are required to be guaranteed by certain domestic and material foreign subsidiaries (the “Guarantors”) and are collateralized by substantially all assets (excluding intellectual property) of the Company and the Guarantors.

Wells Fargo and the lenders and other financial institutions party to the Credit Agreement, and certain of their respective affiliates, have provided, and in the future may provide, financial, banking and related services to the Company. These parties have received, and in the future may receive, compensation from the Company for these services.

The foregoing is a summary description of certain terms of the Credit Agreement and does not purport to be complete, and it is qualified in its entirety by reference to the full text of the Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

(d)Exhibits

Ubiquiti Networks, Inc. ExhibitEX-10.1 2 ex10-1.htm SECOND AMENDED AND RESTATED CREDIT AGREEMENT Blueprint   Published CUSIP Number: 90291HAA9 Revolver CUSIP Number: 90291HAC5 Term Loan CUSIP Number: 90291HAB7       $900,…To view the full exhibit click here
About UBIQUITI NETWORKS, INC. (NASDAQ:UBNT)
Ubiquiti Networks, Inc. develops performance networking technology for service providers and enterprises. The Company offers a portfolio of networking products and solutions. Its service provider product platforms provide carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing. Its enterprise product platforms provide wireless local area network (WLAN) infrastructure, video surveillance products, switching and routing solutions, and machine-to-machine communication components. Its products and solutions include radios, antennas, software, communications protocols and management tools that are designed to deliver carrier and enterprise class wireless broadband access and other services primarily in the unlicensed radio frequency spectrum. Its service provider and carrier solutions include Base Station/Backhaul/Customer Premise Equipment (CPE)/Bridge-airMAX, Network Routing Platform-EdgeMAX and Point-to-point Wireless Backhaul-airFiber.