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Item 1.01
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Entry into a Material Definitive Agreement.
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On Deck Capital, Inc. (the "Company") has now obtained COVID-related amendments to all four of its warehouse debt facilities with outstanding balances, which have been publicly filed. The two most recent amendments are described below. The other two were previously reported.
ODAF II Facility Amendment
On May 19, 2020, OnDeck Asset Funding II, LLC (“ODAF II”), a wholly-owned subsidiary of the Company, amended (the “ODAF II Amendment”) its asset-backed revolving debt facility (the “ODAF II Facility”) to modify the Credit Agreement, dated as of August 8, 2018, by and among ODAF II, as Borrower, the Lenders party thereto from time to time, Ares Agent Services, L.P., as Administrative Agent and Collateral Agent, and Wells Fargo Bank, N.A, as Paying Agent. Certain capitalized terms not defined in this section of the report are used with the meanings ascribed to them in the ODAF II Facility and the ODAF II Amendment.
Pursuant to the ODAF II Amendment, from March 11, 2020 to July 22, 2020, receivables granted temporary relief in response to the COVID-19 pandemic will generally not be considered delinquent under the ODAF II Facility so long as such receivable is paying in accordance with its modified terms. The ODAF II Amendment also modifies the concentration limitations to provide, among other things, additional flexibility for certain loans impacted by COVID-19. It also provides additional flexibility with respect to certain portfolio performance test levels. Until July 22, 2020 (the “Amendment Period”), the Lenders are not obligated to make any loans to ODAF II, ODAF II is restricted from purchasing receivables from the Company (other than certain subsequent line of credit advances) and any cash remaining in the ODAF II Facility is not permitted to be distributed to the Company. As of the effective date of the ODAF II Amendment, the advance rate was reduced from its original advance rate of 87.5% to 78.8%. The advance rate is subject to further reduction on each payment date under the ODAF II Facility with a final reduction to 70% to occur no later than July 23, 2020. The ODAF II Amendment does not modify the commitment amount or interest rate of the ODAF II Facility.
The foregoing description of the ODAF II Amendment does not purport to be complete and is qualified in its entirety by reference to (i) the full text of the ODAF II Amendment, which is filed as Exhibit 10.1 to this report and incorporated herein by reference, and (ii) the ODAF II Agreement, which was filed as Exhibit 10.30 to Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
ODART Facility Amendment
On May 20, 2020, OnDeck Account Receivables Trust 2013-1 LLC (“ODART”), a wholly-owned subsidiary of the Company, amended (the “ODART Amendment”) its asset-backed revolving debt facility (the “ODART Facility”) to further modify the Fifth Amended and Restated Credit Agreement, dated as of March 12, 2019, by and among ODART, as Borrower, the Lenders party thereto from time to time, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank Securities Inc., as Syndication Agent, Documentation Agent and Lead Arranger and Deutsche Bank Trust Company Americas, as Paying Agent. Certain capitalized terms not defined in this section of the report are used with the meanings ascribed to them in the ODART Facility as amended by prior amendments thereto and the ODART Amendment.
Pursuant to the ODART Amendment, from March 11, 2020 to July 23, 2020, receivables granted temporary relief in response to the COVID-19 pandemic will generally not be considered delinquent under the ODART Facility so long as such receivable is paying in accordance with its modified terms. The ODART Amendment also modifies the concentration limitations to provide, among other things, additional flexibility for certain loans impacted by COVID-19 and, following the Amendment Period, certain additional eligibility criteria will apply to receivables impacted by COVID-19. Until the earlier of (x) July 23, 2020 or (y) such time as the Effective Advance Rate has reached 70% (the “Amendment Period”), the Lenders are not obligated to make any loans to ODART, ODART is restricted from purchasing receivables from the Company (other than certain subsequent line of credit advances) and any cash remaining in the ODART Facility is not permitted to be distributed to the Company. As of the effective date of the ODART Amendment, the advance rate was reduced from 80% to 75% and following the Amendment Period, the applicable advance rate shall be further reduced to 70%. The ODART Amendment also reduces the commitment amount from $180 million to $125 million. The interest rate of the ODART Facility was not amended.
The foregoing description of the ODART Amendment does not purport to be complete and is qualified in its entirety by reference to (i) the full text of the ODART Amendment, which is filed as Exhibit 10.2 to this report and incorporated herein by reference, and (ii) the ODART Agreement, which was filed as Exhibit 10.12 to Company’s Annual Report on Form 10-K for the year ended December 31, 2019.