Comtech Announces Improved Credit Agreement Terms and Increased Financial Flexibility.

Comtech Telecommunications Corp. has negotiated amendments to its senior secured credit agreement, improving terms and increasing financial flexibility. The agreement includes a long-term financial covenant holiday and the waiver of prepayment fees on current debt. The company also received a $35 million subordinated debt investment from an existing preferred stockholder, which will be used to prepay a portion of the senior secured debt and increase liquidity.

Chandler, Ariz. -- Comtech Telecommunications Corp. (NASDAQ: CMTL) ("Comtech" or the "Company"), a leading global communications technology provider, has announced significant amendments to its senior secured credit agreement. These changes aim to enhance financial flexibility and liquidity, supporting the company's business plans [1].

The amended credit agreement includes a long-term financial covenant holiday, which means that the next test of the fixed charge coverage ratio, net leverage ratio, and minimum EBITDA covenants will occur after the fiscal quarter ending on January 31, 2027. Additionally, lenders have waived prepayment fees on the current prepayment of senior debt and deferred the company's prior obligations to make certain amortization and fee payments [1].

Concurrently, Comtech has received a $35 million subordinated debt investment from an existing holder of the company’s convertible preferred stock and subordinated debt. This new subordinated debt features favorable terms, including no make whole provision, no cash interest requirement, and interest accruing at the same rate as the cash interest paid on the company’s senior secured term loan debt. The net proceeds from this investment will be used to prepay a portion of the senior secured debt and increase liquidity [1].

Ken Traub, Chairman, President, and Chief Executive Officer of Comtech, commented, "These agreements reflect the strong confidence our 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 we reported in the third quarter of fiscal 2025, Comtech is stronger today and well-positioned to capitalize on growing opportunities for our next-generation public safety solutions and mission-critical communications technologies" [1].

The details of the amendment to the senior secured credit agreement and the subordinated debt agreement are qualified in their entirety by the terms of the underlying documents, which will be made available in the Company’s filings with the Securities and Exchange Commission ("SEC"). 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 https://comtech.com/investors/ [1].

References:
[1] https://www.stocktitan.net/news/CMTL/comtech-announces-amendment-to-senior-secured-credit-agreement-which-u17n3ewrjkel.html