Higher One gets $200 million five-year revolver at Libor plus 175 bps

By Susanna Moon

Chicago, Oct. 18 - Higher One Holdings, Inc.'s wholly owned subsidiary Higher One, Inc. refinanced its loans with a $200 million five-year senior secured revolving credit facility at Libor plus 175 basis points.

Interest ranges from Libor plus 175 bps to 225 bps, based on leverage. The unused fee is 25 bps to 37.5 bps.

The company closed the revolver on Tuesday with Bank of America as lead arranger and book manager and Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The agreement may be upsized by an additional $100 million with lender agreement and replaces the company's $50 million revolving credit facility.

The sublimit for the issuance of letters of credit is $20 million and for swingline loans is $10 million.

The loans drawn under the facility are payable in a single maturity on Oct. 16, 2017. As of Oct. 17, there was $30 million outstanding under the agreement.

Covenants require the company to maintain EBITDA on a consolidated basis for the prior four fiscal quarters of at least $50 million; a funded debt-to-EBITDA ratio of no more than 2.5 times between Oct. 16 and Dec. 31, 2014 and 2 times after that; and a fixed-charge coverage ratio of at least 1.25 times.

"This new credit facility should continue to provide us with liquidity within a strong capital structure," Mark Volchek, chief executive officer of Higher One, said in a press release.

"It allows us to continue to make necessary investments to grow the business and opportunistically repurchase shares of the company while maintaining the financial flexibility to capitalize on future strategic opportunities."

Higher One is a company based in New Haven, Conn., focused on creating cost-saving efficiencies for higher education institutions and providing high-value services to students.

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