Business Context and Reporting Period
BILL Holdings, Inc. filed this Form 8-K on September 2, 2022, reporting an August 29, 2022 amendment to the financing arrangements of its wholly owned subsidiary, Divvy Peach, LLC. The facility finances purchases of Divvy charge card receivables.
Key Financial and Liquidity Terms
- Warehouse facility capacity: Increased from $75.0 million to $225.0 million.
- Maturity: Extended from June 2, 2023 to June 3, 2024. All outstanding borrowings and other obligations are due at final maturity.
- Interest rate: Based on either the SOFR Rate or an Adjusted Benchmark Rate, plus an applicable margin of 2.65% to 2.75%, depending on principal outstanding and the period outstanding.
- Collateral: Secured by Divvy charge card receivables and certain related collateral.
- Guarantee: BILL entered into a limited guaranty and indemnity agreement covering certain obligations of Divvy Peach.
Material Changes Versus the Prior Arrangement
- Borrowing capacity increased by $150.0 million, or 200%, from $75.0 million to $225.0 million.
- Maturity extended by approximately one year, from June 2, 2023 to June 3, 2024.
- The amendment restated the existing Revolving Credit and Security Agreement.
Outlook, Risks, and Contingencies
The filing does not provide earnings guidance, operating forecasts, revenue, profit, cash flow, or margin information. The expanded facility may increase liquidity available to support Divvy charge card receivables, but it also creates additional secured borrowing capacity and related interest obligations.
The agreement includes customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, affiliate transactions, dividends, and other restricted payments. Events of default include nonpayment, material breaches, covenant violations, defaults on other material debt, bankruptcy or insolvency, material judgments, certain ERISA-related events, and certain changes of control.
The filing states that the complete credit agreement will be filed as an exhibit to BILL’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2022.
Important Facts for Investors to Verify
- Actual borrowings and utilization under the $225.0 million facility.
- Applicable SOFR or benchmark rate, margin, and resulting interest expense.
- Details of BILL’s limited guaranty and indemnity obligations.
- Collateral coverage, receivables performance, and compliance with facility covenants.
- Any subsequent amendments, defaults, repayments, or refinancing before the June 3, 2024 maturity.