AppFolio adds $50 million term loan, doubles revolver to $50 million

By Wendy Van Sickle

Columbus, Ohio, Dec. 31 – AppFolio, Inc. entered into a second amendment to its credit agreement dated March 16, 2015 to add a $50 million term loan and double the revolving line of credit to $50 million, according to an 8-K filing with the Securities and Exchange Commission.

The amendment was entered on Dec. 24.

The maturity date of each tranche is Dec. 24, 2023.

The company is also now permitted to make unlimited restricted junior payments and enter into acquisitions in which it is the purchaser with no dollar cap on those acquisitions, so long as AppFolio maintains some specified liquidity requirements and leverage ratios.

The amendment also modifies some financial covenants to require that AppFolio maintains an EBITDA to interest expense ratio of at least 3x and a funded debt to EBITDA ratio of no more than 3.5x, with step downs of 0.25x per year until the ratio reaches 2.5x.

The company is not required to maintain the ratios if its liquidity has equaled or exceeded the greater of $20 million and 20% of the sum of the outstanding principal amount of the term loan and commitments under the revolver.

If AppFolio enters into an acquisition with a purchase price greater than or equal to $20 million, then the required leverage ratio will be increased by 0.5x for the 12-month period immediately following the acquisition.

Borrowings bear interest at Libor plus an initial margin of 200 basis points, with the margin subject to adjustment within a range of 150 bps to 200 bps, based on the company’s leverage ratio.

The revolving commitment fee will be 25 bps per annum unless the average usage of the revolver is less than or equal to $30 million, in which case the fee will be 37.5 bps.

Wells Fargo Bank, NA is the administrative agent.

The Goleta, Calif., company develops cloud-based software.

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