Santa Clara, Calif., — Nov. 10, 2017 – Avaya Holdings announced today that its wholly-owned subsidiary, Avaya Inc., has successfully priced a $2.925 billion senior secured term loan, which was upsized from $2.425 billion, in response to strong market demand. The term loan results in a simplified, single-tranche long-term debt capitalization structure upon emergence at a level consistent with the total debt structure contemplated by Avaya’s Plan of Reorganization.
“The successful upsize and pricing of this senior secured term loan is a very important step in our emergence from chapter 11, simplifies our capital structure, and strengthens Avaya’s ability to pursue future growth opportunities,” said Jim Chirico, Avaya’s President and Chief Executive Officer.
The revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
The term loan will mature in 2024 and bear interest at a rate of LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor. The facility is being arranged by Goldman Sachs Bank USA as administrative agent, syndication agent, joint lead arranger and joint bookrunner, as well as Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners. Centerview Partners LLC and Zolfo Cooper LLC are Avaya's financial and restructuring advisors and Kirkland & Ellis LLP is Avaya’s restructuring counsel.
A hearing to consider confirmation of Avaya’s Plan of Reorganization is scheduled to commence on November 28, 2017. The funding and closing of the term loan is expected to occur in December 2017, concurrent with the anticipated effective date of Avaya’s Plan of Reorganization. The proceeds from the term loan will be used to support Avaya’s emergence from chapter 11.
Avaya is a leading global business communications company, providing an expansive portfolio of software and services for contact center and unified communications—offered on premises, in the cloud, or as a hybrid solution. Today’s digital world requires communications enablement, and no other company is better positioned to do this than Avaya. For more information, please visit www.avaya.com.
Cautionary Note Regarding the Chapter 11 Cases
Avaya’s security holders are cautioned that trading in Avaya securities during the pendency of Avaya’s chapter 11 proceeding will be highly speculative and will pose substantial risks. It is possible some or all of Avaya’s currently outstanding securities may be cancelled and extinguished upon confirmation of a restructuring plan by the United States Bankruptcy Court for the Southern District of New York. In such an event, Avaya’s security holders would not be entitled to receive or retain any cash, securities or other property on account of their cancelled securities. Trading prices for Avaya’s securities may bear little or no relation to actual recovery, if any, by holders thereof in Avaya’s chapter 11 proceeding. Accordingly, Avaya urges extreme caution with respect to existing and future investments in its securities.
Cautionary Note Regarding Forward-Looking Statements
This document contains certain “forward-looking statements.” All statements other than statements of historical fact are “forward-looking” statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," “our vision,” "plan," "potential," "preliminary," "predict," "should," "will," or “would” or the negative thereof or other variations thereof or comparable terminology and include, but are not limited to, statements regarding timing of exit from the chapter 11 proceeding, technology innovation and operational projections. Avaya has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While Avaya believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. These factors, and those risks discussed in Avaya Inc.’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015, may cause its actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. For a further list and description of such risks and uncertainties, please refer to Avaya’s filings with the SEC that are available at www.sec.gov. Avaya cautions you that the list of important factors included in Avaya Inc.’s SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. Avaya undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.