Summary
Rocket Companies, Inc. (RKT) announced on August 10, 2022, the entry into a new $1.0 billion Revolving Credit Agreement (the "2022 Credit Agreement") by its indirect subsidiary, Rocket Mortgage, LLC. This new agreement matures on August 10, 2025, and replaces the prior credit facility which was terminated on the same date without penalty. The proceeds from the 2022 Credit Agreement are intended for general corporate purposes, providing the company with financial flexibility. This new credit facility is unsecured and will bear interest at a variable rate. It includes customary covenants and financial maintenance requirements, such as limitations on incurring additional debt, paying dividends, and restrictions on mergers and asset sales. The company must also adhere to specified net leverage ratios, minimum liquidity, and tangible net worth requirements. Failure to comply with these covenants could lead to the termination of credit commitments and acceleration of outstanding debt.
Key Highlights
- 1Rocket Mortgage, LLC entered into a new $1.0 billion Revolving Credit Agreement on August 10, 2022.
- 2The new credit agreement matures on August 10, 2025.
- 3The purpose of the new credit facility is for general corporate purposes.
- 4The 2022 Credit Agreement replaced the previous Revolving Credit Agreement dated August 10, 2021, which was terminated without penalty.
- 5Borrowings under the new agreement are unsecured and bear interest based on a base rate plus an applicable margin.
- 6The agreement includes standard covenants and restrictions on debt, dividends, and asset disposals.
- 7Financial maintenance covenants include requirements for net leverage, liquidity, and tangible net worth.