Higher One gets $100 million five-year facility at Libor plus 375 bps

By Marisa Wong

Morgantown, W.Va., Aug. 4 – Higher One Holdings, Inc. entered into a five-year credit agreement on Thursday for an $85 million senior secured term loan facility and a $15 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent, swingline lender and letter-of-credit issuer.

Borrowings will bear interest at Libor plus an applicable margin that is initially 375 basis points. The applicable margin will step down if a specified total net leverage ratio is achieved, beginning with the fiscal quarter ending Dec. 31.

The commitment fee is 50 bps initially and will step down to 42.5 bps and 37.5 bps if a specified total net leverage ratio is achieved, beginning with the fiscal quarter ending Dec. 31.

The credit agreement requires mandatory prepayments of outstanding term loans using cash proceeds from asset sales or debt issuances not permitted under the senior credit facilities, as well as excess cash flow.

The term loan requires scheduled quarterly payments, with an amortization of 2.5% made on the closing date, with a step-up to 5% amortization during the second and third years, 7.5% during the fourth year and 10% during the fifth year, with the balance due at maturity.

The credit agreement requires Higher One and its subsidiaries to comply with a maximum total net leverage ratio financial maintenance covenant and a minimum fixed-charge coverage ratio covenant.

Higher One is a New Haven, Conn.-based financial technology company for higher-education institutions.

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