Retail Supplier Announces New $195 Million Credit Facility -- EnergyChoiceMatters.com

Retail Supplier Announces New $195 Million Credit Facility

July 8, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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Via Renewables, Inc. (Via Renewables or the Company) announced the closing of a new three-year $195.0 million senior secured borrowing base credit facility (the "Senior Credit Facility") to replace its existing senior secured credit facility.

The Senior Credit Facility, which includes a $55 million accordion, replaces the Company’s current $227.5 million credit facility, which was set to mature October 2023. The Senior Credit Facility provides for working capital loans, acquisition loans, swingline loans and letters of credit.

Woodforest National Bank is the Administrative Agent, and acted as the Sole Bookrunner and Syndication Agent. Woodforest National Bank and BOKF, NA (d/b/a Bank of Texas) acted as Joint Lead Arrangers.

"The successful closing of this facility demonstrates our continued proactive approach to managing our balance sheet. This agreement positions us to execute on our strategic initiatives, invest in our growth opportunities, and continue our disciplined pursuit of acquisitions that can accelerate our growth," said Keith Maxwell, Via Renewables’ President and Chief Executive Officer.

Mike Barajas, Via Renewables’ Chief Financial Officer, said, "Via Renewables’ new facility allows for increased operating flexibility through less restrictive financial covenants and provides us with a very competitive, long-term capital structure to generate value for our shareholders in 2022 and beyond."

More specifically, in an 8-K, Via said that, on June 30, 2022, Via Renewables, Inc., and Spark Holdco, LLC ('Spark Holdco', and together with certain subsidiaries of the Company and Spark Holdco, the 'Co-Borrowers') entered into a Credit Agreement (the 'Credit Agreement'), with Woodforest National Bank, as administrative agent (the 'Agent'), swing bank, swap bank, issuing bank, joint-lead arranger, sole bookrunner and syndication agent, BOKF, NA (d/b/a/ Bank of Texas), as joint-lead arranger and issuing bank, and the other financial institutions party thereto.

Via said in the 8-K that the Credit Agreement provides for a senior secured credit facility (the 'Senior Credit Facility'), which allows the Co-Borrowers to borrow up to $195.0 million on a revolving basis. The Senior Credit Facility provides for working capital loans, loans to fund acquisitions, swingline loans and letters of credit. The Senior Credit Facility expires on June 30, 2025, and all amounts outstanding thereunder are payable on the expiration date.

Via said in the 8-K that borrowings under the Senior Credit Facility bear interest at the following rates depending on the classification of the borrowing and provided further that at no time shall the interest rate be less than four percent (4.0%) per annum:

• the Base Rate (a rate per annum equal to the greatest of (a) the prime rate, (b) the Federal Funds Rate plus ½ of 1% and (c) Term SOFR for a one month tenor plus 1.0%, provided, that the Base Rate shall not at any time be less than 0%), plus an applicable margin of 3.25% to 4.50% depending on the type of borrowing and the average outstanding amount of loans and letters of credit under the Credit Agreement at the end of the prior fiscal quarter;
• the Term SOFR (a rate equal to the forward looking secured overnight financing rate published by the SOFR administrator on the website of the Federal Reserve Bank of New York or any successor source with either a comparable tenor (for any calculation with respect to a SOFR loan) or a one month tenor (for any calculation with respect to a Base Rate loan)), plus an applicable margin of 3.25% to 4.50% depending on the type of borrowing and the average outstanding amount of loans and letters of credit under the Credit Agreement at the end of the prior fiscal quarter; or
• the Daily Simple SOFR (a rate equal to the forward looking secured overnight financing rate published by the SOFR administrator on the website of the Federal Reserve Bank of New York or any successor source and applied on a daily basis by the Agent in accordance with rate recommendations for daily loans), plus an applicable margin of 3.25% to 4.50% depending on the type of borrowing the average outstanding amount of loans and letters of credit under the Credit Agreement at the end of the prior fiscal quarter, plus a liquidity premium added by the Agent to each borrowing.

Via said in the 8-K that the Co-Borrowers are required to pay a non-utilization fee of 0.50% quarterly in arrears on the unused portion of the Senior Credit Facility. In addition, the Co-Borrowers are subject to additional fees including an upfront fee, an annual agency fee, and letter of credit fees.

Via said in the 8-K that the Credit Agreement contains covenants that, among other things, require the maintenance of specified ratios or conditions including:

• Minimum Fixed Charge Coverage Ratio. The Company must maintain a minimum fixed charge coverage ratio of not less than 1.10 to 1.00. The Minimum Fixed Charge Coverage Ratio is defined as the ratio of (a) Adjusted EBITDA to (b) the sum of, among other things, consolidated interest expense, letter of credit fees, non-utilization fees, earn-out payments, certain restricted payments, taxes, and payments made on or after July 31, 2020 related to the settlement of civil and regulatory matters if not included in the calculation of Adjusted EBITDA.
• Maximum Total Leverage Ratio. The Company must maintain a ratio of (x) the sum of all consolidated indebtedness (excluding eligible subordinated debt and letter of credit obligations), plus (y) gross amounts reserved for civil and regulatory liabilities identified filings with the Securities and Exchange Commission, to Adjusted EBITDA of no more than 2.50 to 1.00.
• Maximum Senior Secured Leverage Ratio. The Company must maintain a Senior Secured Leverage Ratio of no more than 2.00 to 1.00. The Senior Secured Leverage Ratio is defined as the ratio of (a) all consolidated indebtedness that is secured by a lien on any property of any loan party (including the effective amount of all loans then outstanding under the Senior Credit Facility but excluding eligible subordinated debt and letter of credit obligations) to (b) Adjusted EBITDA for the most recent twelve month period then ended.

The above description of certain terms of the Credit Agreement does not purport to be complete, and a complete copy of the agreement is included in Via's 8-K

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