Financing Debt

2014 Credit Agreement

On August 22, 2014, the Company, entered into the agreements described below to modify certain terms of the 2013 Credit Agreement in order to permit the additional financings and investments to facilitate the consummation of the Esso Card transaction.

On August 22, 2014, the Company entered into the 2014 Amendment Agreement. Pursuant to the 2014 Amendment Agreement, certain lenders party to the 2013 Credit Agreement consented to the amendment and restatement of the 2013 Credit Agreement in the form of the 2014 Credit Agreement.

The 2014 Amendment Agreement (i) provides for a new tranche of term loans under the 2014 Credit Agreement in an aggregate principal amount equal to $222,500 on the terms and conditions set forth in the 2014 Credit Agreement, (ii) modifies certain of the negative covenants as described below in the description of the 2014 Credit Agreement and (iii) provides for the addition of Wright Express International Holdings Limited as a designated borrower, subject to specified conditions precedent.

Concurrently, on August 22, 2014, the Company entered into the 2014 Credit Agreement. The 2014 Credit Agreement provides for a term loan facility in an amount equal to $500,000 that matures on January 31, 2018, and a $700,000 secured revolving credit facility, secured by pledges of stock of certain subsidiaries of the Company, with a $150,000 sublimit for letters of credit and a $20,000 sublimit for swingline loans, that terminates on January 31, 2018.

The 2014 Credit Agreement amends and restates the 2013 Credit Agreement. The 2014 Credit Agreement increases the outstanding amount of the term loans from $277,500 to $500,000, and does not change the amount of the $700,000 revolving loan. A portion of the indebtedness owing under the 2014 Credit Agreement is the same indebtedness as formerly evidenced by the 2013 Credit Agreement.

Proceeds from the 2014 Credit Agreement may be used for working capital purposes, acquisitions, payment of dividends and other restricted payments, refinancing of indebtedness, and other general corporate purposes.

Amounts outstanding under the 2014 Credit Agreement bear interest at a rate equal to, at the Company’s option, (a) the Eurocurrency Rate, as defined in the 2014 Credit Agreement, plus a margin of 1.25% to 2.75% based on the ratio of consolidated funded indebtedness of the Company and its subsidiaries to consolidated EBITDA or (b) the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the prime rate announced by Bank of America N.A., and (iii) the Eurocurrency Rate plus 1.00%, in each case plus a margin of 0.25% to 1.75% based on the ratio of consolidated funded indebtedness of the Company and its subsidiaries to consolidated EBITDA. In addition, the Company has agreed to pay a quarterly commitment fee at a rate per annum ranging from 0.20% to 0.45% based on the ratio of consolidated funded indebtedness of the Company and its subsidiaries to consolidated EBITDA of the daily unused portion of the 2014 Credit Agreement.

The 2014 Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. The 2014 Credit Agreement also requires that the Company maintain at the end of each fiscal quarter the following financial ratios:


•	a consolidated EBIT to consolidated interest charges ratio of no less than 3.00 to 1.00, measured quarterly; and


•	a consolidated funded indebtedness (excluding the amount of consolidated funded indebtedness due to permitted securitization transactions) to consolidated EBITDA ratio of no more than 3.25 to 1.00, measured quarterly.

The Company may elect to increase the permissible ratio under the latter financial covenant to 3.75 to 1.00 (for four fiscal quarters) or to 4.25 to 1.00 (for two fiscal quarters) in connection with certain acquisitions.

$400 Million Notes Outstanding

On January 30, 2013, the Company, completed a $400,000 offering in aggregate principal amount of 4.750 percent senior notes due 2023 (the “Notes”) at an issue price of 100.0 percent of the principal amount, plus accrued interest, from January 30, 2013, in a private placement to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and in offshore transactions pursuant to Regulation S under the Securities Act. The Notes were issued pursuant to the Indenture among the Company, the guarantors listed therein, and The Bank of New York Mellon Trust Company, N.A., as trustee.

The Notes will mature on February 1, 2023, and interest will accrue at the rate of 4.750 percent per annum. Interest is payable semiannually in arrears on February 1 and August 1 of each year, commencing on August 1, 2013.

The Notes are guaranteed on a senior unsecured basis by each of the Company’s restricted subsidiaries and each of the Company’s regulated subsidiaries that guarantees the Company’s 2013 Credit Agreement, which, as of the issue date, consist of four of the Company’s restricted subsidiaries. WEX Bank, which represents a substantial amount of the Company’s operations, is not a guarantor and is not be subject to many of the restrictive covenants in the indenture governing the Notes.

The Notes and guarantees described above are general senior unsecured obligations ranking equally with the Company’s existing and future senior debt, senior in right of payment to all of the Company’s subordinated debt, and effectively junior in right of payment to all of the Company’s existing and future secured debt, including the Company’s 2013 Credit Agreement, to the extent of the value of the collateral securing such debt. In addition, the Notes and the guarantees are structurally subordinated to all liabilities of the Company’s subsidiaries that are not guarantors, including WEX Bank.

At any time on or after February 1, 2018, the Company may redeem the Notes, in whole or in part, at the following redemption prices (expressed as a percentage of principal amount of the Notes) if redeemed during the twelve month period beginning on February 1 of the following years: (i) 102.375% percent in 2018, (ii) 101.583 percent in 2019, (iii) 100.792 percent in 2020, and (iv) 100.0 percent in 2021 and thereafter; plus, in each case, accrued and unpaid interest, if any, to, but excluding, the date of redemption. At any time prior to February 1, 2018, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100.0 percent of the principal amount of such Notes redeemed plus a “make-whole” premium (as described in the Indenture), together with any accrued and unpaid interest, if any, to, but excluding, the date of redemption.

In addition, at any time prior to February 1, 2016, the Company may, subject to certain conditions, redeem up to 35 percent of the Notes from the proceeds of certain equity offerings at a redemption price of 104.75% percent of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.

Upon the occurrence of a change of control of the Company (as described in the Indenture), the Company must offer to repurchase the Notes at 101 percent of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Under the terms of the 2013 Credit Agreement, the $800,000 secured revolving credit facility was reduced to $700,000 as a result of the $400,000 Notes offering.

The Company capitalized approximately $15,547 in loan origination fees in association with these borrowings. The Company wrote-off approximately $1,000 of previous issuance costs in the first quarter of 2013.

The Company used the net proceeds of this offering to repay the outstanding amount under the revolving portion of its 2013 Credit Agreement and to pay related fees and expenses and for general corporate purposes.

2013 Credit Agreement

On January 18, 2013, the Company entered into the 2013 Credit Agreement, among the Company, as borrower, WEX Card Holdings Australia Pty Ltd, a wholly-owned subsidiary of the Company, as specified designated borrower, Bank of America, N.A., as administrative agent and letter of credit issuer, and the other lenders party thereto. The 2013 Credit Agreement provided for a five-year $300,000 term loan facility, and a five-year $800,000 secured revolving credit facility with a $150,000 sub-limit for letters of credit. The indebtedness covenant under the 2013 Credit Agreement required that the Company reduce the revolving commitments under the 2013 Credit Agreement on a dollar-for-dollar basis to the extent that the Company issues more than $300,000 in principal amount of senior or senior subordinated notes of the Company. Subject to certain conditions, including obtaining relevant commitments, the Company had the option to increase the facility by up to an additional $100,000.

The 2013 Credit Agreement amended, restated and substituted for the 2011 Credit Agreement. The 2013 Credit Agreement increased the outstanding amount of the term loan from $185,000 to $300,000 and increased the amount of the revolving loan from $700,000 to $800,000. A portion of the indebtedness owing under the 2013 Credit Agreement was the same indebtedness as formerly evidenced by the 2011 Credit Agreement.

2013 Credit Agreement would have matured in January 2018, unless extended pursuant to the terms of the 2013 Credit Agreement.

2011 Credit Agreement

On May 23, 2011, the Company entered into the 2011 Credit Agreement. The 2011 Credit Agreement was secured by pledges of the stock of the Company’s foreign subsidiaries. The 2011 Credit Agreement provided for a five-year $200,000 amortizing term loan facility and a five-year $700,000 revolving credit facility with a $100,000 sub-limit for letters of credit. Term loan payments in the amount of $2,500 per quarter began on June 30, 2011, and were scheduled to continue on the last day of each September, December, March and June thereafter, through and including March 31, 2016. On the maturity date for the term agreement, May 23, 2016, the remaining outstanding principal amount of $150,000 would have been due. The Company capitalized approximately $6,200 in loan origination fees in association with this borrowing and wrote-off approximately $700 of previous issuance costs in the second quarter of 2011.

The 2011 Credit Agreement was replaced in January 2013 by the 2013 Credit Agreement.

The following table presents information about the outstanding borrowings under the 2013 and 2014 Credit Agreement:



	December 31,
	2014			2013
Outstanding balance on revolving line-of-credit and term loan with interest based on LIBOR	$	696,250		$	285,000
Outstanding balance on revolving line-of-credit and term loan with interest based on Prime	67,700			—
Outstanding balance on revolving line-of-credit and term loan with interest based on Eurocurrency	137,614			—
Outstanding balance on $400 million 4.750% interest rate notes outstanding	400,000			400,000
Total outstanding balance on revolving line-of-credit facility, term loan and notes	$	1,301,564		$	685,000

Weighted average rate of revolving line-of-credit facility and term loan based on LIBOR	2.92		%	1.93		%
Weighted average rate of revolving line-of-credit facility and term loan based on Prime	5.00		%	—		%
Weighted average rate of revolving line-of-credit facility and term loan based on Eurocurrency	2.88		%	—		%

As of December 31, 2014, the weighted average interest rate for all the financing borrowings under the 2014 Credit Agreement was 3.10 percent.

As of December 31, 2014, the Company has posted approximately $5,150 letters of credit as collateral for lease agreements and virtual card and fuel payment processing activity at our foreign subsidiaries. Accordingly, at December 31, 2014, the Company had $279,536 of availability under the 2014 Credit Agreement, subject to the covenants as described below.

Financing Interest

The following table presents the components of financing interest expense:



	Year ended December 31,
	2014			2013			2012
2011 Credit Agreement
$700 Million Revolver:
Interest expense based on LIBOR	$	—		$	350		$	3,103
Interest expense based on the prime rate	—			54			1,083
Fees	—			36			1,369
Amortization of loan origination fees	—			43			1,100
$200 Million Term Loan:
Interest expense based on LIBOR	—			170			3,339
Amortization of loan origination fees	—			11			297
	$	—		$	664		$	10,291
2013 Credit Agreement
$700 Million Revolver:
Interest expense based on LIBOR	$	573		$	400		$	—
Interest expense based on Prime	419			—			—
Fees	1,361			2,098			—
Amortization of loan origination fees	757			1,122			—
$300 Million Term Loan:
Interest expense based on LIBOR	3,667			5,496			—
Amortization of loan origination fees	301			491			—
	$	7,078		$	9,607		$	—
2014 Credit Agreement
$700 Million Revolver:
Interest expense based on LIBOR	$	1,723		$	—		$	—
Interest expense based on Prime	972			—			—
Interest expense based on Eurocurrency	484			—			—
Fees	733			—			—
Amortization of loan origination fees	574			—			—
$500 Million Term Loan:
Interest expense based on LIBOR	4,468			—			—
Amortization of loan origination fees	276			—			—
	$	9,230		$	—		$	—
$400 Million Notes Outstanding:
4.750% interest expense	$	19,000		$	17,469		$	—
Amortization of loan origination fees	734			674			—
	$	19,734		$	18,143		$	—

Realized losses on interest rate swaps	$	—		$	—		$	109
Deferred loan costs associated with the extinguishment of debt	—			1,004			—
Other	—			1			33
Total financing interest expense	$	36,042		$	29,419		$	10,433
Average interest rate (including impact of interest rate swaps):
Based on LIBOR	2.30		%	1.93		%	1.79		%
Based on prime	3.89		%	3.75		%	3.75		%
Based on Eurocurrency	2.81		%	—		%	—		%
Average debt balance at LIBOR	$	452,911		$	300,056		$	366,387
Average debt balance at prime	$	35,765		$	19,162		$	28,885
Average debt balance at Eurocurrency	$	17,216		$	—		$	—

Debt Covenants

The 2014 Credit Agreement and the Indenture contain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries and, in certain limited circumstances, WEX Bank and the Company’s other regulated subsidiaries, to (i) incur additional debt, (ii) pay dividends or make other distributions on, redeem or repurchase capital stock, or make investments or other restricted payments, (iii) enter into transactions with affiliates, (iv) dispose of assets or issue stock of restricted subsidiaries or regulated subsidiaries; (v) create liens on assets, or (vi) effect a consolidation or merger or sell all, or substantially all, of the Company’s assets. These covenants are subject to important exceptions and qualifications. At any time that the Notes are rated investment grade, which is not currently the case, and subject to certain conditions, certain covenants will be suspended with respect to the Notes. WEX Bank and the Company’s other regulated subsidiaries will not be subject to some of the restrictive covenants in the Indenture that place limitations on the Company and its restricted subsidiaries’ actions, and where WEX Bank and the Company’s regulated subsidiaries are subject to covenants, there are significant exceptions and limitations on the application of those covenants to WEX Bank and the Company’s regulated subsidiaries.

Other

As of December 31, 2014, WEX Bank pledged approximately $488,976 of fleet receivables held by WEX Bank to the Federal Reserve Bank as collateral for potential borrowings, through the Federal Reserve Bank Discount Window. Amounts that can be borrowed are based on the amount of collateral pledged to the Federal Reserve Bank and were approximately $269,182 as of December 31, 2014. As of December 31, 2014, WEX Bank had no borrowings on this line of credit through the Federal Reserve Bank Discount Window.