Notes Payable

9 Months Ended

Sep. 30, 2020

The Company is the borrower under that certain Credit Agreement, dated as of March 11, 2020, among Open Lending, LLC, UBS AG, Stamford Branch, as administrative agent, the lenders from time to time party thereto and the other parties thereto, as amended, the Credit Agreement (the “Credit Agreement”). Pursuant to the Credit Agreement, the lenders thereto funded a term loan (“Term Loan”) in a principal amount of $170.0 million, which was used primarily to fund a non-liquidation distribution to its unitholders and provide cash reserves. The current maturity date for the Credit Agreement is March 2027. The term loan bears interest at a rate of LIBOR plus 6.50% (subject to a LIBOR floor of 1%) or the base rate plus 5.50%. For the three months ended September 30, 2020, the effective interest rate was 7.50%. The Credit Agreement contains a maximum total net leverage ratio financial covenant that is tested quarterly and is calculated based on the ratio of the Company’s Adjusted EBITDA (as defined in the Credit Agreement) to funded indebtedness. The maximum total net leverage ratio begins at 4.75 to 1.0 and then gradually decreases from year-to-year down to 2.5 to 1.0 on or after June 30, 2026.

The Company’s outstanding Notes Payable consists of the following:


	September 30, 2020		December 31, 2019
	(in thousands)
Notes payable	$	—	$	3,334
Term loan due 2027	167,875		—
Less: debt issuance costs	(9,061)		(21)
Less: current portion of notes payable	(4,675)		(2,484)
Long-term notes payable, net of debt issuance costs	$	154,139	$	829

As of September 30, 2020, the Company was in compliance with the debt covenants contained in the Credit Agreement.