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Credit Facilities
9 Months Ended
Sep. 26, 2014
Debt Disclosure [Abstract]  
Credit Facilities
CREDIT FACILITIES
Harmonic has a bank line of credit facility with Silicon Valley Bank that provides for borrowings of up to $10.0 million and matures on December 31, 2014. This facility, which became effective in August 2011 and was amended in August 2012, and further amended in August 2013, contains a financial covenant that requires Harmonic to maintain a ratio of unrestricted cash, accounts receivable and short term investments to current liabilities (less deferred revenue) of at least 1.75 to 1.00. On August 22, 2014, a third amendment was made to extend the maturity date to December 31, 2014 and the LIBOR margin was reduced from 1.75% to 1.50%.
There were no borrowings during the nine months ended September 26, 2014. As of September 26, 2014, the amount available for borrowing under this facility, net of $0.2 million of standby letters of credit, was $9.8 million.
As of September 26, 2014, the Company’s ratio under that covenant was 3.26 to 1. In the event of noncompliance by Harmonic with the covenants under the facility, including the financial covenant referenced above, Silicon Valley Bank would be entitled to exercise its remedies under the facility, including declaring all obligations immediately due and payable. As of September 26, 2014, Harmonic was in compliance with the covenants under the line of credit facility. Borrowings pursuant to the line would bear interest at the bank’s prime rate (3.25% at September 26, 2014,) or at LIBOR for the desired borrowing period (an annualized rate of 0.15% for a one month borrowing period at September 26, 2014) plus 1.50%, or 1.65%. Borrowings are not collateralized.