Credit Agreement

9 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Credit Agreement

Credit Agreement

On May 16, 2022, New AspenTech and certain of its subsidiaries entered into a Borrower Assignment and Accession Agreement (the "Borrower Assignment and Accession Agreement") relating to the Amended and Restated Credit Agreement dated December 23, 2019, as amended from time to time, among Heritage AspenTech, the other loan parties from time to time party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as previously amended, the “Credit Agreement”).

The Borrower Assignment and Accession Agreement was entered into in connection with the Transactions and Merger. Pursuant to the Borrower Assignment and Accession Agreement, among other things, Heritage AspenTech assigned all of its obligations under the Credit Agreement and related documents to New AspenTech and New AspenTech became the borrower and a loan party under the Credit Agreement. In connection with the Borrower Assignment and Accession Agreement certain subsidiaries acquired in connection with the Transactions and Merger also were joined as guarantors and loan parties under the Credit Agreement.

The Credit Agreement provides for a $200.0 million secured revolving credit facility and a $320.0 million secured term loan facility. The outstanding balance under the Credit Agreement as of the May 16, 2022 Closing Date was $279.5 million.

Principal outstanding under the Credit Agreement bears interest at a rate per annum equal to, at the Company's option, either: (1) the sum of (a) the highest of (i) the rate of interest last quoted by The Wall Street Journal in the United States as the prime rate in effect, (ii) the NYFRB Rate plus 0.5%, and (iii) the LIBO rate multiplied by the Statutory Reserve Rate plus 1.0%, plus (b) a margin initially of 0.5% for the first full fiscal quarter ending after the date of Credit Agreement and thereafter based on its leverage ratio (as defined in the Amended and Restated Credit Agreement); or (2) the sum of (a) the LIBO rate multiplied by the Statutory Reserve Rate, plus (b) a margin initially of 1.5% for the first full fiscal quarter ending after the date of the Credit Agreement and thereafter based on its leverage ratio. The interest rate as of June 30, 2022 was 2.74% on $276.0 million in outstanding borrowings on its term loan facility.

As of June 30, 2022, the Company's current and non-current borrowings primarily consisting of the term loan facility were $28.0 million and $245.6 million, respectively.

Outstanding balances of the indebtedness under the revolving credit facility mature on December 23, 2024. The following table summarizes the maturities of the term loan facility:

Year Ended June 30,	Amount
	(Dollars in Thousands)
2023	$	28,000
2024	36,000
2025	212,000
Total	$	276,000

The Credit Agreement contains affirmative and negative covenants customary for facilities of this type, including restrictions on incurrence of additional debt, liens, fundamental changes, asset sales, restricted payments (including dividends) and transactions with affiliates. There are also financial covenants regarding maintenance as of the end of each fiscal quarter of a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 2.50 to 1.00. As of June 30, 2022, the Company was in compliance with these covenants.