LendingTree Secures $475M Credit Facility with 5-Year Maturities

LendingTree has announced a $475M credit facility, consisting of a $400M term loan B and a $75M revolving credit facility, both with five-year maturities. The term loan carries an interest rate of SOFR + 450 bps. Shares rose 1.19% pre-market to $63.90.

LendingTree (NASDAQ: TREE) has announced the closing of a $475 million credit facility, consisting of a $400 million five-year Term Loan B and a $75 million revolving credit facility, both with five-year maturities. The term loan carries an interest rate of SOFR + 450 bps. Shares rose 1.19% pre-market to $63.90 [2].

The new financing, led by Bank of America and Truist Securities, replaces the company's existing Term Loan B due 2028 and Apollo loan agreement. Key terms include interest rates of SOFR + 450 bps on the term loan and SOFR + 350 bps on the revolver, with a potential 25-basis point reduction upon achieving a B2 rating from Moody's [1].

The refinancing significantly reduces interest expense, removes restrictive covenants including minimum cash and AEBITDA requirements, and restores the company's ability to repurchase shares and make strategic investments [3]. LendingTree's new $475M credit facility significantly improves financial flexibility while reducing interest expenses and removing restrictive covenants [1].

The financial benefits are substantial. Interest rates on the new facility (SOFR + 450bps for the term loan and SOFR + 350bps for the revolver) represent a reduction from previous arrangements. There's also potential for further 0.25% reduction if the company achieves a B2 rating with stable outlook from Moody's [1]. Perhaps most significant is the removal of restrictive covenants that had limited LendingTree's operational flexibility. The elimination of minimum cash and AEBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization) requirements from the previous Apollo loan agreement gives management considerably more latitude. The company explicitly notes regaining the ability to repurchase shares and make strategic investments - critical tools for capital allocation that had been constrained [1].

This refinancing indicates growing lender confidence in LendingTree's financial trajectory. By securing this facility through major financial institutions like Bank of America and Truist Securities, the company gains both improved terms and institutional validation. The transaction aligns with management's stated focus on enhancing the company's financial foundation while positioning for future growth opportunities. The removal of restrictive covenants, reduced interest expense, and increased operational flexibility combine to strengthen LendingTree's competitive positioning in the online financial services marketplace [1].

References:
[1] https://www.stocktitan.net/news/TREE/lendingtree-announces-closing-of-475-million-credit-8w54j673lthm.html
[2] https://seekingalpha.com/news/4488325-lendingtree-announces-475m-credit-facility
[3] https://www.prnewswire.com/news-releases/lendingtree-announces-closing-of-475-million-credit-facility-302536190.html