Laureate Education adds $155 million tranche to revolver

By William Gullotti

Buffalo, N.Y., Sept. 20 – Laureate Education Inc. entered into a third amendment to its third amended and restated credit agreement with Citibank, NA as administrative agent on Sept. 18, according to an 8-K filing with the Securities and Exchange Commission.

The latest amendment to its existing five-year revolving credit facility, which provides a $145 million revolver that will still mature Oct. 7, 2024, adds a new $155 million revolving tranche due Sept. 18, 2028 for a total borrowing capacity of $300 million.

The new tranche includes a $10 million subfacility for letters of credit.

The company may add revolving commitments or term loans up to an amount that would not cause the total commitments to exceed the greater of $172.5 million and 50% of the company’s consolidated EBITDA plus additional amounts so long as the company’s leverage ratio would not exceed 2.25x.

Borrowings from the new tranche will bear currency-appropriate interest at SOFR or Euribor plus a margin ranging from 175 basis points to 250 bps, depending on the company’s total debt to consolidated EBITDA ratio.

As with the original tranche, the company is required to maintain a maximum consolidated senior secured debt to consolidated EBITDA ratio of 3x as of the last day of each quarter starting with the quarter ending Dec. 31, provided that if the company’s consolidated total debt to consolidated EBITDA ratio is not greater than 4.75x and less than 25% of the facility is utilized, the covenant will not apply.

All obligations under the overall agreement are unconditionally guaranteed by Exeter Street Holdings LLC, a domestic subsidiary of Laureate, and the related guarantees are secured by perfected first-priority secured interest in substantially all of the assets of both Laureate and Exeter.

Laureate is a Baltimore-based network of degree-granting higher education institutions.

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