Quantum Corp (NYSE:QTM) recently revealed that it has successfully finished refinancing its current debt courtesy of $210 million credit facilities.
The credit facilities include a $165 million secured term credit facility headed by an investment fund that is managed by a U.S-based fixed income management firm. Quantum’s credit lender provided the other credit facility worth $45 million.
The firm will use the $210 million to offset its outstanding debt as well as interests and related fees. The debt includes $124.6 million from its current term loan and $21.2 million that is part of its current revolving credit facility. The credit facilities will also supplement Quantum with capital which it will use to fund its growth initiatives and other corporate purposes.
Quantum’s cash and cash equivalents were at roughly $14 million at the time the company announced the $210 million. The company also drew down the amount from the new $4.4 million new revolving credit facility.
“This financing is a major milestone for Quantum and validates our credit-worthiness and business model outlook,” stated Quantum CEO Jamie Lerner.
Lerner also pointed out that the new facility together with the company’s other financial resources place them in a position that allows the firm to roll out its growth strategy. He also added that the company looks forward to more engagement with the investment community. However, this will only happen as soon as it is done with the challenges highlighted in the previous announcement.
Loan facility terms
The aggregate principal amount for the new facility is $165 million from which $150 million will be drawn at the close. The company will also refund $15 million without contingencies on or before January 11, 2019. Quantum will feature a 2.0% Libor floor rate with 1,000 per annum LIBOR plus basis points payable in cash every month. Another loan term is that Quantum plans to secure a $45 million revolving credit facility.
QTUM stock performance
Quantum stock closed the latest trading session on Friday at $2.02. The stock’s current 52-week high is $6.5 while its 52-week low is $7.92. The stock’s current market cap is $66.48 million. The stock had an overall bearish performance over the past month although it did turn bullish during the holidays. However, it looks like the stock will close the year while slightly oriented towards the 52-week low.
Source: stockchart.com
The stock demonstrated an impressive performance on Friday, showing its ability to rally and close on a positive note. Friday’s rally demonstrated a 36% gain and the current earnings per share stands at $-0.25. Its year-to-date performance currently stands at -63.77%, while the current monthly performance was -17.74%.
As far as the analyst opinions are concerned, two analysts expect the stock to outperform ratings. The stock also currently has a “buy” rating and the current Wall Street analysts expected price target is $8 which is still quite some ways off considering the current price range. The price has also not appropriately recovered after hitting its 52-year low. The previously announced financial report revealed that the stock earnings failed to hit the $0.03 expected target.
About Quantum
Quantum is a California-based firm that makes data storage systems and devices such as disk-based systems and tape drive systems. The firm has mainly had a strong presence in the video content industry for more than ten years with notable involvement with cloud infrastructure. It makes solutions for multiple industries including the defense department, the cloud services industry and the autonomous vehicle industry. The company has over 100,000 clients that range from global enterprises to small businesses.