In a private placement financing transaction, Ribbon issued 55,000 shares of Series A preferred stock, along with warrants to purchase approximately 4.86 million shares of common stock. Each share of Series A preferred stock was sold at a price of $970 per share.
The private placement resulted in gross proceeds of approximately $53.4 million, with participation from Ribbon's three largest stockholders - Neuberger Berman client funds, JPMorgan Chase & Co., and Swarth Investments Ltd.
Ribbon used the net proceeds, together with cash on hand and funds received from the sale of its fixed rate interest rate swap, to prepay $75 million of the principal amount outstanding on the Term Loan A under Ribbon's senior secured credit agreement.
"We are pleased with the continued interest and support we received from both existing and new stockholders, as well as the banks included in our credit facility," said Ribbon Communications CFO Mick Lopez. "We believe the structure of the preferred stock, coupled with the previously announced amendment to the credit facility, complements our existing senior secured credit facility in a stockholder friendly way, while preserving balance sheet flexibility going forward. With the outlook for future interest rate increases diminishing, we believe the value of our fixed rate swap has likely peaked, making this an ideal time to capture this value and effectively reduce our total outstanding debt by approximately $20 million," continued Mr. Lopez.
