Following the announcement of an equity move and the release date for its financials, shares of 8×8, Inc. (NASDAQ: EGHT) saw a significant surge on the US stock charts. The stock price of EGHT experienced a notable increase of 10.76%, reaching $2.78 during the extended session, subsequent to an 8.19% rise during the regular session, closing at $2.51.
Securing a Major Credit Facility
8×8, Inc. (EGHT) received a new $200 million Delayed Draw Term Loan Credit Facility. EGHT intends to use the proceeds from this loan, coupled with $25 million from its existing cash reserves, to pay down the whole $225 million due under its current Term Loan, which expires on August 3, 2027. The projected beginning interest rate for the new loan is the Secured Overnight Financing Rate (SOFR) + 3.00%, which is roughly 3.6 percentage points lower than the current Term Loan.
Enhanced Financial Flexibility
The lowered interest rate, along with the lower principal of the new Delayed Draw tenure Loan, is projected to result in significant cash interest savings throughout the loan’s tenure. This new loan also allows for stock repurchases, subject to specific requirements and limitations. The new Delayed Draw Term Loan matures on August 15, 2027. Furthermore, the firm may opt to make early repayments without penalty before to maturity.
This financial move indicates the lenders’ confidence in 8×8’s business strategy and performance, boosting the company’s financial flexibility and supporting its long-term growth objectives. The initial financing of the loans under the Credit Agreement is planned to take place in August 2024, subject to customary closing conditions.
Upcoming Financial Results Announcement
In addition to the loan agreement, 8×8 announced the release of its financial results for the first quarter ended June 30, 2024, scheduled on Wednesday, August 7, 2024 after the market closes. EGHT will have a conference call on the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the findings.
