Refinancing
- We have repaid significant debt with proceeds from IPO – net debt down to $1,132 million as of 30 June
- Comprehensive refinancing of bank debt and notes completed in early August:
- $475m Term Loan, upsized from original $400m in view of strong demand
- €300m Senior Secured Notes
- $585m Revolver and ancillary facility1
- Tender Offer for remaining 9% PIK Notes with 34% acceptance; outstanding Notes repaid early September
- Key benefits new facilities
- Higher flexibility to pursue strategy; public company style covenants
- Longer maturities – 5-7 year tenor
- Enhanced liquidity
- Much lower interest cost
- Currently reviewing asset-backed facilities
Financial Policy
- Deleveraging to current levels is transformative for CEVA
- Very positive reactions, will create opportunities and accelerate growth
- Company would have been cash flow positive in 2017, pro forma for new capital structure
- CEVA has a strong strategic platform (service portfolio, geographic footprint, competencies) – priority is to develop business organically; we have flexibility to do selective, small M&A at later stage to strengthen in certain areas
- Target to pay a first small dividend in FY19 for FY18, larger payouts only once further delivered
- Committed to further deleveraging towards 1.5x-2.0x Net debt / Adjusted EBITDA over medium term
Current Securities in Issue
Facility |
Amount ($ equivalent) |
Currency |
Maturity |
Rates |
Term Loan B |
475 |
USD |
2025 |
L+375 (leverage step down to L+350) |
Notes |
350 (EUR 300) |
EUR |
2025 |
5.25% |
Revolving Credit Facility |
585 |
multi currency |
2023 |
L+237.5 |
ABS/ABL (Existing) |
400 |
multi currency |
2020 |
TBD (Existing: L+175 to L-250) |
Comments
- One-tier senior secured structure (except for ABS/ABL)
- Instruments have received same BB- / B1 credit rating as company
- Have achieved much lower interest rates, pleased with outcome
- >$100 m Finance expense savings expected vs. old capital structure, subject to base rates, achieved margins and drawings
Prospectus Notes
The prospectus can be downloaded here