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Subsequent Event
12 Months Ended
Jan. 02, 2016
Subsequent Events [Abstract]  
SUBSEQUENT EVENT
SUBSEQUENT EVENT
On January 28, 2016, Cadence entered into a $300.0 million three-year senior unsecured non-amortizing term loan facility, or the 2019 Term Loan, with a group of lenders led by JPMorgan Chase Bank, N.A., as administrative agent. The 2019 Term Loan is unsecured, and the proceeds will be used for general corporate purposes, including the repurchase of its common stock.
Amounts outstanding under the 2019 Term Loan initially accrue interest at a rate equal to LIBOR plus a margin of 1.125% per annum, which may increase to a rate equal to LIBOR plus a margin of up to 1.875% per annum, depending on Cadence’s leverage ratio.
The covenants of the 2019 Term Loan are consistent with Cadence’s existing five-year senior unsecured revolving credit facility and include customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens and make certain investments, asset dispositions and restricted payments. In addition, the term loan agreement contains certain financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 2.75 to 1, with a step-up to 3.25 to 1 for one year following an acquisition by Cadence of at least $250.0 million that results in a pro forma leverage ratio between 2.50 to 1 and 3.00 to 1. The term loan agreement also requires Cadence to maintain an EBITDA to interest charges ratio of at least 3.00 to 1.