Nortel Networks will refinance a loan due this month with a newly obtained one-year, $1.3 billion credit facility, the company announced today.

The new loan--from J.P. Morgan Securities, Citigroup, the Royal Bank of Canada and Export Development Canada--matures in February 2007. It includes a senior, secured, one-year, $850 million term loan and a senior, unsecured, one-year, $450 million term loan.

Nortel will use the new loan to refinance $1.275 billion in outstanding 6.125% notes due Feb. 15, 2006.

The interest rates on the new loans are unspecified. In a statement today, Nortel said the interest would be “equal to LIBOR (or in certain cases a defined base rate) plus an applicable margin as set forth in the commitment letter.” LIBOR, the “London Inter-Bank Offered Rate,” is based on the rates that London banks offer one another for inter-bank deposits. According to Bankrate.com, the current one-year LIBOR rate is 4.92%.

The $850 million loan, secured by a first-priority lien on essentially all of the company’s U.S. and Canadian assets, requires unspecified minimum adjusted EBITDA levels. Both loans require that the company’s unrestricted cash and cash equivalents--combined with that of its parent, Nortel Networks Corp.--remain above $1 billion. At the end of the third quarter, Nortel had $3 billion in cash, down from $3.06 billion at the end of the second quarter.

In the release announcing the refinancing, Nortel declined to set a specific date for its next quarterly earnings report, saying only that the next earnings call will coincide with the filing of its 10-K annual report.