L.O.T.W. #134 - Lantronix "reconnects" with SVB - FCB on new ABL-lite deal
$15.0 million ABL revolver refinanced ~ $11.8 million of term debt, enhancing repayment and covenant flexibility and lowering pricing
Receivables backed revolving facility refinanced an amortizing term loan which weas scheduled to mature in Aug ‘26. Migration of credit exposure to formula based line offers greater repayment flexibility while simultaneously lowering the overall cost of debt capital
👓At a Glance
Borrower: Lantronix, Inc.
Lender: Silicon Valley Bank / First-Citizens Bank
Deal Size: $15 million
Structure: Formula based AR revolver w/ full dominion (lockbox) with streamline toggle tied to liquidity threshold
Rate: Variable - Prime + 0.0% to 0.5% with 5.0% floor
Term: ~36 months
Use of Proceeds: Refinance existing term loan; support working capital requirements
Source: SEC 8-K Filing
📷Borrower Snapshot
Sector: Information Technology
Subsector: Communications Equipment
Ownership: Public (NASDAQ: LTRX)
Commercial Stage: Revenue generating, LTM EBITDA - / breakeven through June 30, 2025
Business Overview: Lantronix delivers integrated compute and connectivity solutions at the edge - spanning hardware, software, and managed services - for Industrial and Enterprise IoT applications. The company empowers AI-Edge Intelligence across markets like smart cities, transportation, healthcare, and data centers through offerings such as Percepxion platforms, embedded modules, out-of-band management, and engineering services. With a global footprint supporting over two million customers, Lantronix combines SaaS-based device management, custom embedded development, and robust connectivity to streamline IoT deployment and lifecycle management.
⚙️Structure & Terms
Source: SEC 8-K Filing
Commitment: $15.0 million formula based revolving line of credit
Borrowing Formula:
90% eligible investment grade accounts (BBB- or Baa3 or higher)
85% eligible accounts (excluding eligible investment grade accounts)
70% eligible foreign accounts (capped at 50% of borrowing base)
Eligible Inventory: N/A
Maturity: August 1, 2028
Collateral: Senior secured all asset lien
Rate: Variable - Prime + 0.0% - 0.5% with all-in floor of 5.0%
spread = 0.0% when liquidity >= $7.5 million
Fees:
$30k commitment fee
0.15% p.a. unused line facility fee; paid quarterly
Financial Covenant:
Min. Liquidity >= $5.0 million
Min. Interest Coverage (Adjusted EBITDA / Int. Expense) >= 1.50:1.00