Comtech Telecommunications Corp. (NASDAQ: CMTL) has negotiated amendments to its senior secured credit agreement that significantly improve the terms in the Company’s favor, increase financial flexibility and enhance liquidity to support the Company’s business plans.
The improved terms of the credit agreement include a long-term financial covenant holiday such that the next test of the fixed charge coverage ratio, net leverage ratio and minimum EBITDA covenants will be after the conclusion of the fiscal quarter ending on January 31, 2027. The lenders also waived prepayment fees on the current prepayment of senior debt and deferred the Company’s prior obligations to make certain amortization and fee payments.
Concurrently, the Company received a capital infusion of $35 million through a subordinated debt investment by an existing holder of the Company’s convertible preferred stock and subordinated debt. This new subordinated debt has favorable terms for the Company: there is no make whole provision, there is no cash interest requirement and interest will generally accrue at the same rate as the cash interest paid on the Company’s senior secured term loan debt. Net proceeds from the new investment are being used to prepay a portion of the senior secured debt and to increase liquidity.
The foregoing description of the amendment to the senior secured credit agreement and the subordinated debt agreement is not complete and is qualified in its entirety by the terms of the underlying documents, copies of which will be made available in the Company’s filings with the Securities and Exchange Commission (SEC).
These agreements reflect the strong confidence of the company’s lenders and preferred stockholders have in the execution of Comtech’s transformation plan, which is already demonstrating success. With improved financial flexibility, coupled with the return to positive cash flow, Comtech reported in the third quarter of fiscal 2025 that the firm is stronger today and well-positioned to capitalize on growing opportunities for the next-generation of public safety solutions in the company’s Terrestrial and Wireless business and mission critical communications technologies in our Satellite and Space business,” said Ken Traub, Chairman, President and Chief Executive Officer.
Additional information can be found in the Company’s Current Report on Form 8-K filed with the SEC and available on Comtech’s investor relations website at this Comtech infopage…
