Square upsizes with $500 million three-year revolving credit facility

By Wendy Van Sickle

Columbus, Ohio, May 6 – Square, Inc. entered into a credit agreement on Friday providing for a three-year $500 million revolver, replacing the company’s previous $375 million revolver entered in 2015, according to an 8-K filing with the Securities and Exchange Commission.

Goldman Sachs Bank USA and Sumitomo Mitsui Banking Corp. are the joint lead arrangers and joint bookrunners. Goldman Sachs is the administrative agent.

The company may add an incremental revolver of up to the greater of $413 million and 100% of its consolidated adjusted EBITDA for the most recently ended period of four fiscal quarters, plus the amount of any permanent optional reductions of commitments, plus an unlimited amount, so long as the company’s total net leverage ratio for the most recently ended period of four fiscal quarters does not exceed 2.5 to 1.0 on a pro forma basis.

There is a $50 million sublimit for the issuance of letters of credit.

Borrowings bear interest at Libor plus a margin of 125 basis points to 175 bps, depending on the company’s net leverage ratio. There is a fee of 15 bps on undrawn commitments.

At closing, no amounts were drawn under the revolver and there were no outstanding letters of credit.

Proceeds may be used for working capital and general corporate purposes.

Square is a San Francisco-based mobile payment company.

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