29 April 2010


GigOptix consolidates debt and cut interest costs

GigOptix Inc of Palo Alto, CA, USA, which designs modulator and laser drivers and transimpedance amplifier (TIA) ICs based on III-V materials as well as polymer electro-optic modulators, has established a new credit facility with Silicon Valley Bank (SVB) that provides the firm lower interest rates, less restrictive covenants and more flexibility with respect to its borrowing base.

The financing should enable GigOptix to achieve its next stage of growth, says Rick Tu of Silicon Valley Bank (a provider of diversified financial services to emerging growth and established technology companies).

GigOptix has also restructured and consolidated its two other outstanding debt instruments with SVB (representing the firm's entire debt), as follows:

  • A $3m line of credit that will increase the amount that GigOptix is entitled to borrow on its net eligible accounts receivables. The initial funding will be used to repay about $1.6m outstanding with Bridge Bank, enabling the firm to terminate its loan and security agreement with them. Under the new line and the reduced interest rate, GigOptix will realize immediate savings in its interest costs of about $40,000 per year.
  • A $400,000 term loan to replace its existing $400,000 term loan with Agility Capital. As a result of the refinancing of this debt, GigOptix will immediately reduce its borrowing costs from 14% to 9% (immediate savings in interest costs of 36%).

See related item:

GigOptix grows 54% in 2009 to $14.8m, but margins hit by ChipX acquisition

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