Paylocity replaced its prior Credit agreement with a $1.75 billion senior secured revolving credit Facility maturing September 17, 2031. The facility can fund working capital, capital expenditures, acquisitions, permitted investments, distributions and share repurchases, while setting Leverage and interest-coverage requirements for the borrowers.

Key Highlights

  • The senior secured revolving facility matures on September 17, 2031.
  • Paylocity had $81.25 million outstanding under the agreement on its effective date.
  • The company may seek up to $875.0 million of additional revolving commitments, subject to customary conditions and lender approval.

The agreement covers permitted acquisitions, investments, distributions and share repurchases. PNC Bank, National Association acts as administrative agent, with Paylocity (NASDAQ: PCTY), its guarantors and participating lenders serving as the other parties.

$1.75B Facility Structure

Paylocity can borrow, repay and borrow again before the facility’s expiration date, subject to the agreement’s conditions. The company may also terminate or reduce lender commitments before Maturity without a premium or penalty, except for customary breakage costs tied to Term SOFR revolving loans. The facility has no scheduled principal amortization before its expiration date. The agreement permits Paylocity to request increased revolving commitments of up to $875.0 million in aggregate. Any increase is subject to customary conditions, and lenders are not required to provide additional commitments.

Pricing And Financial Tests

The Margin ranges from 1.00% to 1.625% for Term SOFR borrowings and from 0.0% to 0.625% for adjusted base-rate borrowings. Paylocity must pay a quarterly commitment fee of 0.10% to 0.25% per annum on the undrawn portion of revolving commitments. The agreement also includes affirmative and negative covenants covering liens, debt, guarantees, mergers, investments, asset disposals, dividends, distributions, fiscal-year changes, organizational documents, negative pledges and affiliate transactions.

Collateral And Default Terms

The obligations are secured by substantially all Assets of Paylocity and its guarantors, subject to specified exceptions. The proceeds may support permitted acquisitions, permitted investments, permitted distributions and share repurchases, in addition to Working Capital and capital expenditures. A default can accelerate the company’s obligations, require cash Collateral for letters of credit, terminate lender commitments and increase the Interest Rate by 2.0%.