Brocade Closing $600 Million Senior Secured Notes Offering

Brocade Communications Systems, Inc. announced the closing of its offering of $300 million in aggregate principal amount of 6.625% senior secured notes that will mature in 2018 at an issue price of 99.239% of the principal amount of the notes, and $300 million in aggregate principal amount of 6.875% senior secured notes that will mature in 2020 at an issue price of 99.114% of the principal amount of the notes. The notes were issued in a private placement to ‘qualified institutional buyers’ in the United States defined in Rule 144A under the Securities Act of 1933, as amended (the ‘Securities Act’), and outside the United States pursuant to Regulation S under the Securities Act. The notes are secured, senior obligations of the Company.

Brocade intends to use up to $150 million of the net proceeds of the offering, together with cash on hand, to retire when due in February 2010 approximately $173 million in outstanding 2.25% subordinated convertible notes originally issued by McDATA Corporation, a wholly owned subsidiary of Brocade. Brocade used approximately $435 million of the net proceeds of the offering to pay down a substantial portion of the outstanding term loan under Brocade’s senior secured credit facility, which has a minimum interest rate of 7.0%.

In connection with the closing of the note offering, the remaining conditions with respect to the previously announced amendment dated January 8, 2010 (the ‘Credit Agreement Amendment’) to the Credit Agreement, dated as of October 7, 2008, by and among the Company, the lenders party thereto, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Morgan Stanley Senior Funding, Inc., as syndication agent, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, and HSBC Bank USA National Association and Keybank National Association, as co-documentation agents (the ‘Credit Agreement’), were satisfied and the Credit Agreement Amendment became effective.