Coherent Corp secures reduced interest rates on term loans By Investing.com

Coherent Corp. (NYSE:), a Pennsylvania-based company specializing in optical instruments and lenses with a market capitalization of $15.6 billion and annual revenue of $5 billion, has successfully renegotiated the terms of its debt, achieving a reduction in interest rates on its existing term loans. The amendment to the credit agreement was executed on January 2, 2025, with JPMorgan Chase (NYSE:) Bank, N.A. serving as the administrative agent. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 2.67.

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The amendment pertains to the company’s term B loans, which had an outstanding aggregate principal amount of approximately $2.23 billion. These existing term B loans have been replaced with new term loans of the same amount but with a lower interest rate margin. Specifically, the margin has been reduced from 1.50% to 1.00% for base rate loans, and from 2.50% to 2.00% for term benchmark loans, with a maintained term benchmark floor of 0.50%.

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This strategic move does not affect the maturity dates of the new term B loans, which remain the same as those of the existing term B loans. Additionally, the maturity dates for the revolving credit facility and the outstanding term A loan facility have not been altered.

The amended credit agreement is expected to provide Coherent Corp. with improved financial flexibility due to the reduced interest expenses on its term loans. The full details of the amendment are available in Exhibit 10.1 of the company’s 8-K filing, which is incorporated by reference.

This financial maneuver comes as part of Coherent Corp.’s ongoing efforts to optimize its capital structure and reduce financing costs. With total debt of approximately $4.2 billion, the reduced interest rates offer potential benefits to the company’s bottom line, although the specific financial impact was not disclosed.

In other recent news, Coherent Corp. has been making significant moves in the laser technology sector. The company is exploring strategic options for its SHARP™ technology, a revolutionary battery recycling process, while also preparing to expand its Texas plant with up to $33 million in federal funds. Analysts from Jefferies and Citi have initiated coverage of Coherent with a Buy rating, signaling confidence in the company’s future under CEO Jim Anderson.

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Coherent Corp. has also recently announced the approval of an amended incentive plan and the election of directors at its Annual Meeting of Shareholders. In terms of financial performance, the company reported its first-quarter results for fiscal year 2025 and shared its projections for the second quarter.

Meanwhile, Apple Inc (NASDAQ:). reported record-breaking total revenue of $94.9 billion for the final quarter of its Fiscal Year 2024, driven by a 6% growth in iPhone sales. The tech giant also announced plans to invest $1 billion in a new manufacturing facility in Indonesia. Analysts from KeyBanc, Wedbush Securities, and Morgan Stanley (NYSE:) have provided varied outlooks on Apple’s future, with KeyBanc maintaining an underweight rating and Wedbush Securities and Morgan Stanley reiterating outperform and overweight ratings, respectively.

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