Lionbridge Replaces Its Senior Secured Term B Debt; Secures New Revolving Credit Facility to Reduce Interest Expense
WALTHAM, Mass., December 21, 2006 -- Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced that it has replaced its entire existing debt facility with a new revolving credit facility of $100.0 million, of which $78 million will be drawn at close. The new bank syndicate credit facility, led by HSBC Bank USA, N.A., will reduce the Company’s annual cost of debt by $1-2 million, depending upon average outstanding balances. It will also provide the Company with greater flexibility to meet its long-term growth and operational goals. The initial interest rate on the new facility will be LIBOR+1.75% as compared to a LIBOR + 3.25% effective rate on the previous facility.
The new credit facility replaces an existing $100 million term loan B facility and $25 million revolver obtained in July of 2005 that consisted of an aggregate funded amount of $102.0 million, of which the company has repaid approximately $22 million to date. With this new revolving credit facility, Lionbridge will retire its previous term loan B facility in its entirety. There are no cash prepayment penalties resulting from the retirement of the former facility. The Company will incur a $2.6 million, non-cash, expense in Q4 of 2006 related to unamortized previously capitalized financing fees under the prior facility. The Company has continuously been in compliance with all covenants under the terms of its term loan B facility as of September 30, 2006, the Company's last reporting date under that facility.
The Company's Chief Financial Officer, Stephen Lifshatz, said, “The establishment of this favorable replacement credit facility, in such short time following the BGS acquisition, indicates the successful financial evolution of Lionbridge. As the Company continues to generate strong cash flows, this revolver-based structure will enable us to lower our interest expense. It also gives us the flexibility to pursue attractive growth opportunities that are consistent with the Company's long-term strategy.”
The new credit facility includes a provision that allows the Company to increase the revolving credit commitment by up to $50 million, subject to certain restrictions and lender approval, over its five-year term.
About Lionbridge
Lionbridge Technologies, Inc. (NASDAQ: LIOX) is a leading provider of globalization and testing services. Lionbridge combines global onshore, near shore and offshore resources with proven program management methodologies to serve as an outsource partner throughout a client’s product and content lifecycle - from development to globalization, testing and maintenance. Global organizations in all industries rely on Lionbridge services to increase international market share, speed adoption of global products and content, and enhance their return on enterprise applications and IT system investments. Based in Waltham, Mass., Lionbridge maintains more than 40 solution centers in 25 countries and provides services under the Lionbridge and VeriTest brands. To learn more, visit http://www.lionbridge.com.
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