Israeli-based global specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) today announced that it has re-financed its existing bank debt. The company has replaced the present loans previously scheduled to be repaid during the coming two years, with a $111 million term loan maturing by October 2018.
Tower said that this re-financing substantially reduces the principal payments for 2015 and 2016 from $101 million to $24 million. Interest on the loans is US$ LIBOR rate plus 3.9% per annum. The schedule of the $111 million loans is $10 million principal payment during each of 2014 and 2015, $14 million during 2016, $56 million during 2017 and $21 million during 2018.
The agreement with the banks also contains a mechanism for prepayment of principal based on any excess cash flow that the company may enjoy, as well as customary fees and financial ratios, which are aligned with the company's business plan.
Tower CEO Russell Ellwanger said, “After performing due diligence on our business plans and financial forecasts, the lending banks have demonstrated their belief in the company by providing this long-term loan. Built upon the foundation of very strong organic growth and the strategic, financial and operationally accretive nature of the Panasonic transaction, this term loan maturing end of 2018 will further enhance our positioning in the market and enable us to more strongly invest in our strategic plans.”
Published by Globes [online], Israel business news - www.globes-online.com - on October 27, 2014
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