Summary
Robinhood Markets, Inc. (HOOD), through its subsidiary Robinhood Securities, LLC (RHS), has entered into an Amended and Restated Credit Agreement that significantly increases its available credit facility. The new agreement provides for a 364-day senior secured revolving credit facility totaling $2.275 billion, with an option to increase commitments by up to an additional $1.1375 billion, bringing the potential total to $3.65 billion. This represents an increase from the previous $2.18 billion facility. This updated credit line is structured into Tranches A, B, and C, each with specific collateral and purposes, including financing margin loans, satisfying NSCC deposit requirements, and meeting reserve requirements under Rule 15c3-3. The interest rates are tied to SOFR, the Federal Funds Effective Rate, or the Overnight Bank Funding Rate, plus an applicable margin. As of the agreement date, no borrowings were outstanding, indicating substantial liquidity available to the company.
Key Highlights
- 1Robinhood's subsidiary, RHS, entered into an Amended and Restated Credit Agreement on April 11, 2022.
- 2The new credit facility is a 364-day senior secured revolving credit facility with a total commitment of $2.275 billion.
- 3The company has the option to increase commitments by up to $1.1375 billion, potentially reaching a total of $3.65 billion.
- 4The facility is structured into Tranche A (margin loans), Tranche B (NSCC deposits), and Tranche C (reserve requirements), each with specific collateral.
- 5Interest rates are based on SOFR or other benchmark rates plus an applicable margin (1.25% for Tranche A, 2.50% for Tranches B & C).
- 6Commitment fees on undrawn amounts are 0.50% per annum.
- 7As of April 11, 2022, there were no outstanding borrowings, leaving the full $2.275 billion available.