Item 1.01 Entry into a Material Definitive Agreement.
On April 28, 2023 (the “Closing Date”), SoFi Technologies, Inc. (the “Company”), the lenders party thereto, the issuing banks party thereto and Goldman Sachs Bank USA, as administrative agent, entered into that certain Amended and Restated Revolving Credit Agreement (the “Credit Agreement”), which amends and restates that certain Revolving Credit Agreement, dated as of September 27, 2018 (as amended, supplemented or otherwise modified prior to the date hereof, including pursuant to Amendment No. 1, dated as of March 29, 2022, the “Existing Credit Agreement”), among Social Finance, Inc., the lenders party thereto, the issuing banks party thereto and Goldman Sachs Bank USA, as administrative agent.
The Credit Agreement amends and restates the Existing Credit Agreement to, among other things, (a) extend the maturity date of the Company’s revolving credit facility to the date that is five years after the Closing Date, (b) change the borrower entity under the revolving credit facility to the Company, (c) replace LIBOR as the term benchmark rate applicable to revolving loans denominated in U.S. Dollars with a secured overnight financing benchmark rate equal to Term SOFR plus a credit spread adjustment of 0.10% and (d) effect certain other changes.
Borrowings under the revolving credit facility bear interest at a rate per annum equal to, at the Company’s option, either (a) the applicable term benchmark rate, subject to a 0.00% floor, or (b) a base rate, in each case, plus an applicable margin of 1.50% for term benchmark loans and 0.50% for base rate loans. Revolving loans may be borrowed, repaid and reborrowed, and are available for working capital and general corporate purposes (including acquisitions, investments and repayments of indebtedness). Up to $100 million of the revolving credit facility may be used for letters of credit. The Credit Agreement enables the Company, from time to time, to increase the revolving credit commitment in an aggregate amount not to exceed $550 million.
The Credit Agreement contains customary covenants that place restrictions on, among other things, the incurrence of debt by any subsidiaries of the Company, granting of liens and sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole. The Credit Agreement also contains financial covenants that require the Company to maintain a certain amount of unrestricted cash and cash equivalents and to meet certain risk-based capital ratios and a leverage ratio. A violation of any of these covenants could result in an event of default under the Credit Agreement. Upon the occurrence of such an event of default or certain other customary events of default, payment of any outstanding amounts under the revolving credit facility may be accelerated and the lenders’ commitments to extend credit under the Credit Agreement may be terminated.
On the Closing Date, the Company was deemed to incur $486 million in borrowings under the Credit Agreement to repay all amounts outstanding under the Existing Credit Agreement.
The foregoing summary of the Credit Agreement does not purport to be complete and is subject to and qualified in its entirety by the full text of the Credit Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2023.