Cubic has signed an amended credit agreement to procure a new unsecured term loan of $450m to improve financial flexibility amid the Covid-19 crisis.

The move increases the company’s existing unsecured revolving credit facility to $850m. The maturity date of the revolving credit facility was extended to 27 March 2025.

JPMorgan Chase Bank will serve as the administrative agent for the credit facilities.

Cubic plans to use the proceeds from the new term loan to repay its outstanding private placement and for general corporate purposes.

The company also noted that the new agreement carries more favourable terms with less restrictive covenants compared to private placements.

Furthermore, the agreement extends the average life of Cubic’s debt by nearly 1.4 years and reduces principal amortization over the next 24 months by $49m.

Cubic chairman, president and CEO Bradley H. Feldmann said: “We are committed to the health and safety of our employees as well as supporting our customers during this unprecedented and rapidly changing environment.

“This transaction underscores the lending community’s confidence in our strategy and the strength of our mission critical offerings.”

Cubic executive vice-president and chief financial officer Anshooman Aga said: “We are very pleased with the successful execution of our new term loan as well as the upsizing and extension of our revolving credit facility.

“This transaction further strengthens Cubic’s financial flexibility through favourable pricing and covenants, an improved maturity profile and 30% additional capacity.”

Headquartered in the US, Cubic offers integrated solutions to the transportation and defence markets worldwide.

Recently, its subsidiary Cubic Mission Solutions was contracted by the US Defense Information Systems Agency (DISA) to continue operating Unified Video Dissemination System (UVDS) architecture.