On Deck Capital subsidiary obtains up to $100 million ABL revolver

By Tali Rackner

Norfolk, Va., Dec. 2 – On Deck Capital, Inc. subsidiary OnDeck Asset Pool, LLC entered into an up to $100 million asset-backed revolving debt facility on Nov. 25 and simultaneously terminated its existing revolver, according to an 8-K filing with the Securities and Exchange Commission.

The new facility has substantially similar terms to the terminated facility. The transaction was completed principally to replace the existing debt facility, which had a borrowing mechanism based on the issuance of loans, with a new debt facility whereby OnDeck Asset Pool borrows funds through the issuance of notes.

The commitment termination date is Aug. 13, 2016, and the facility termination date is Aug. 13, 2017.

The interest rate is Libor plus 400 basis points, and the borrowing base advance rate is 95%.

Financial covenants include requirements with respect to minimum tangible net worth, maximum leverage ratio, minimum consolidated liquidity and minimum unrestricted cash.

Proceeds will be used to finance OnDeck Asset Pool’s purchase of small business loans from On Deck in a transaction structured to be bankruptcy remote.

Jefferies Funding LLC is the administrative agent, and Deutsche Bank Trust Co. Americas is the paying agent and collateral agent.

New York-based On Deck Capital is an online platform for small business lending.

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