8-KMaterial AgreementsFinancial EventsExhibits & Filings

Affirm Holdings, Inc. 8-K Report, Material Agreement (Jan 25, 2021)

Filed January 25, 2021For Securities:AFRM

Summary

Affirm Holdings, Inc. (AFRM) has filed an 8-K report detailing the execution of a new Revolving Credit Agreement on January 19, 2021. This agreement provides the company with an initial aggregate commitment of $185 million, maturing in January 2024. The primary purpose of this facility is to fund general corporate purposes for the Borrower (Affirm, Inc.) and its subsidiaries. Notably, at the time of the filing, no amounts had been drawn under this new credit line, indicating proactive liquidity management or the absence of immediate funding needs. The credit agreement is unsecured and offers flexibility in interest rate options, tied to either a Eurodollar rate (adjusted LIBOR) or a base rate, with applicable margins. The company also pays a commitment fee on unused portions of the credit line. The obligations are guaranteed by Affirm Holdings, Inc. and certain domestic subsidiaries, with a provision for future guarantees. The agreement includes covenants and restrictions, such as limitations on incurring additional debt, creating liens, restricted payments, and asset dispositions, alongside financial maintenance covenants like leverage ratios and minimum tangible net worth. These provisions are standard for such credit facilities and aim to ensure the company's financial stability.

Key Highlights

  • 1Affirm entered into a new $185 million Revolving Credit Agreement on January 19, 2021, maturing on January 19, 2024.
  • 2The credit facility is intended to support general corporate purposes for Affirm, Inc. and its subsidiaries.
  • 3No amounts were drawn under the credit agreement as of the closing date, indicating current liquidity.
  • 4Borrowings under the agreement are unsecured.
  • 5The credit agreement includes covenants restricting additional debt, liens, restricted payments, and asset disposals.
  • 6Financial maintenance covenants require adherence to specific leverage ratios, tangible net worth, and unrestricted cash levels.
  • 7The company is required to pay a commitment fee on the unused portion of the credit line.

Frequently Asked Questions

The primary purpose of the Revolving Credit Agreement is to provide Affirm, Inc. and its subsidiaries with funds for general corporate purposes in the ordinary course of business.

The initial aggregate commitment under the Revolving Credit Agreement is $185 million, and it matures on January 19, 2024.

No, as of the closing date of the agreement (January 19, 2021), no amounts were drawn under the Revolving Credit Agreement.

The agreement includes covenants that limit the company's ability to incur additional debt, create liens, make restricted payments (like dividends), and dispose of assets. It also requires maintaining specific leverage ratios, tangible net worth, and minimum unrestricted cash levels.