News: Optoelectronics
5 November 2026
AOI agrees new credit facility providing $30m in revolving commitments and $170m in initial term loan commitments
On 30 October, Applied Optoelectronics Inc (AOI) of Sugar Land, TX, USA (a designer and manufacturer of optical and hybrid fibre-coaxial networking products for AI data centers, cable TV and broadband fiber access networks) entered into a credit agreement with lenders as well as East West Bank as administrative agent for the secured parties.
Replacing the prior credit facility, the new credit facility provides $30m in revolving commitments and $170m in initial term loan commitments. With a scheduled maturity date of 30 October 2030, it includes a feature that allows the firm to request incremental term loan commitments of up to $50m, pursuant to certain conditions. Proceeds of the term loans may be used to purchase or refinance eligible equipment. Borrowings under the revolving loan may be used for working capital and general corporate purposes.
AOI’s obligations under the new credit facility will be secured by substantially all of the company’s assets, including certain subsidiary equity, subject to customary exclusions. At AOI’s option, borrowings under the new credit facility will accrue interest based on either (i) an alternate base rate (ABR) plus the applicable rate (ABR loan) or (ii) the term secured overnight financing rate (term SOFR), plus 0.10%, plus the applicable rate (SOFR loan). The applicable rate for SOFR loans is between 2.50% and 3.25%, and the applicable rate for ABR loans is between 1.25% and 1.75%, and in each case, based on the consolidated senior leverage ratio.
Interest on SOFR loans is payable on the last day of each applicable interest period (and, in the case of any interest period of more than three months’ duration, on each day prior to the last day of such interest period that occurs at three-month intervals after the first day of such interest period). Interest on ABR loans is payable quarterly. In addition, the initial term loans amortize quarterly in an amount equal to 3.5714% of the aggregate outstanding amount of the initial term loans on the last day of the initial term loan availability period.
The new credit facility requires the firm to maintain certain financial covenants and contains representations and warranties, and events of default applicable to the company that are customary for agreements of this type.
On 29 October, in connection with the AOI’s entry into the new credit facility, the firm terminated the loan and security agreement, dated 31 July 2025, with the lenders and BOKF NA (trading as BOK Financial) as administrative agent for the lenders. AOI paid a $350,000 termination fee in connection with the termination of the prior credit facility. That was set to mature on 31 July 2028 and, as of 29 October 2026, the firm had unused revolving commitments of $35m.
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