Brocade (BRCD) revealed the pricing of its offering of $300 million in aggregate principal amount of 6.625% senior secured notes that will mature in 2018 at an issue price of 99.239% of the principal amount of the notes, and $300 million in aggregate principal amount of 6.875% senior secured notes that will mature in 2020 at an issue price of 99.114% of the principal amount of the notes. The notes will be secured, senior obligations of the company.
Brocade intends to use up to $150 million of the net proceeds of the offering, together with cash on hand, to retire when due in February 2010 approximately $173 million in outstanding 2.25% subordinated convertible notes originally issued by McDATA Corp, a wholly owned subsidiary of Brocade. Brocade also intends to use the balance of the net proceeds of the offering to pay down a substantial portion of the outstanding term loan under the company's senior secured credit facility, which has a minimum interest rate of 7.0%.
The sale of the notes is expected to close on or about January 20, 2010.
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