Bandwidth Inc. (NASDAQ: NASDAQ:BAND), a software company specializing in communications services, has expanded its borrowing power through a significant amendment to its credit agreement. Effective May 1, 2024, the company has doubled its revolving credit commitments from $50 million to $100 million. Alongside this increase, Bandwidth also raised its swingline loan sublimit from $5 million to $10 million.
The amendment, involving Bank of America (NYSE:BAC) as the administrative agent and including BofA Securities, Inc. and Wells Fargo (NYSE:WFC) Securities, LLC as Joint Lead Arrangers and Joint Bookrunners, also adjusted the company's minimum liquidity requirements.
Bandwidth is now required to maintain at least $82.5 million in liquidity, up from $75 million. This liquidity, which includes undrawn borrowing commitments, is tested at the end of each fiscal quarter and upon incurring certain actions tied to negative covenant baskets.
Furthermore, the maturity date of the credit agreement has been extended. Originally set to mature on August 1, 2028, the new terms prolong the agreement to May 1, 2029, or 91 days before the scheduled maturity or mandatory conversion date of any of Bandwidth's outstanding convertible notes, whichever comes first.
This strategic move by Bandwidth provides the company with increased financial flexibility, enhancing its ability to manage cash flow and invest in growth opportunities. The expanded credit facility and extended maturity date reflect the company's ongoing efforts to strengthen its financial position and support its operational objectives.
This financial update is based on a press release statement and the latest 8K filing with the Securities and Exchange Commission.
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