8x8, Inc. announced that it has secured a new $200 million Delayed Draw Term Loan Credit Facility (the ?Delayed Draw Term Loan? or ?Credit Agreement?). The Company intends to use the proceeds from the Delayed Draw Term Loan plus $25 million from existing cash balances to fund the prepayment of the entire $225 million outstanding under the Company?s existing Term Loan maturing August 3, 2027.

The Company expects the initial interest rate of the new Delayed Draw Term Loan to be the Secured Overnight Financing Rate (SOFR) plus 3.00%, approximately 3.6 percentage points lower than its existing Term Loan. The lower interest rate, combined with the lower principal outstanding on the new Delayed Draw Term Loan, is expected to result in significant cash interest expense savings for the duration of the term loan. The terms of the Delayed Draw Term Loan also allow for stock repurchases, subject to certain conditions and limitations.

Delayed Draw Term Loan Details: The initial funding of loans under the Credit Agreement is expected to occur in August, 2024, subject to customary closing conditions. Loans made under the Delayed Draw Term Loan will bear interest at an annual rate equal to the applicable SOFR, plus a margin of 2.50% to 3.00%, based on the consolidated total net leverage ratio of the Company and its subsidiaries. The new Delayed Draw Term Loan will mature on August 15, 2027.

In addition to scheduled principal payments, the Company, at its election, may make early repayments without penalty at any time prior to maturity. Loans under the Credit Agreement contain customary financial covenants as well as affirmative and negative covenants customary for transactions of this type, including minimum interest coverage, maximum consolidated total net leverage and maximum consolidated secured leverage and limitations with respect to share repurchases, indebtedness, liens, investments, dividends, disposition of assets, change in business and transactions with affiliates. The Delayed Draw Term Loan will be guaranteed by certain of the Company?s wholly-owned subsidiaries, subject to certain customary exceptions.

Concurrent with any borrowing under the Credit Agreement, the Delayed Draw Term Loan will be secured by a perfected security interest in substantially all of the Company?s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.