XML 30 R18.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Financing and Other Debt | 9 Months Ended
--- | ---
Sep. 30, 2018
Debt Disclosure [Abstract] |
Financing and Other Debt |
9. | Financing and Other Debt
The following table summarizes the Company’s total outstanding debt:
(In thousands) | September 30, 2018 |  | December 31, 2017
Revolving line-of-credit facility under 2016 Credit Agreement (a) | $ | — |  |  | $ | 136,535 |
Term loans under 2016 Credit Agreement (a) | 1,753,904 |  |  | 1,602,875 |
Notes outstanding (a) | 400,000 |  |  | 400,000 |
Securitized debt | 111,556 |  |  | 126,901 |
Participation debt | 140,965 |  |  | 184,990 |
WEX Latin America debt | 7,808 |  |  | 9,747 |
Total gross debt | $ | 2,414,233 |  |  | $ | 2,461,048 |
Current portion of gross debt | $ | 245,608 |  |  | $ | 404,233 |
Less: Unamortized debt issuance costs | (6,744 | ) |  | (7,015 | )
Short-term debt, net | $ | 238,864 |  |  | $ | 397,218 |
Long-term gross debt | $ | 2,168,625 |  |  | $ | 2,056,815 |
Less: Unamortized debt issuance costs | (27,750 | ) |  | (29,063 | )
Long-term debt, net | $ | 2,140,875 |  |  | $ | 2,027,752 |
Supplemental information under 2016 Credit Agreement: |  |  |
Letters of credit (b) | $ | 53,718 |  |  | $ | 27,500 |
Borrowing capacity (c) | $ | 666,282 |  |  | $ | 405,965 |
(a) See Note 11, Fair Value, for more information regarding the Company’s 2016 Credit Agreement and notes outstanding. (b) Collateral for lease agreements, virtual card and fuel payment processing activity at the Company’s foreign subsidiaries (c) Contingent on maintaining compliance with the financial covenants as defined in the Company’s 2016 Credit Agreement 2016 Credit Agreement The 2016 Credit Agreement provides for secured tranche A and tranche B term loan facilities in original principal amounts equal to $455.0 million and $1,335.0 million respectively, and a $720.0 million secured revolving credit facility, with a sublimit for letters of credit and swingline loans. Amounts due under the 2016 Credit Agreement mature in July 2023, subject to certain adjustments as more fully described below. Prior to maturity, amounts borrowed under the credit facility will be reduced by mandatory quarterly payments of $5.4 million and $3.4 million for tranche A and tranche B term loan facilities, respectively. On January 17, 2018, the Company repriced the secured tranche B term loans under the 2016 Credit Agreement, which reduced the applicable interest rate margin for the Company’s tranche B term loan facility by 50 basis points for both Eurocurrency Rate (as defined in the 2016 Credit Agreement) borrowings and base rate borrowings, and increased the outstanding amounts on these tranche B term loans from $1,182.0 million to $1,335.0 million. In addition, the repricing amendment made certain other changes to the 2016 Credit Agreement including increasing the maximum consolidated leverage ratio for the period December 31, 2018 through September 30, 2019, and upon the occurrence of an acquisition meeting certain specified criteria, permitting to incurrence of unsecured indebtedness as long as the Company is in pro forma compliance with the financial covenants, resetting the six month soft recall period for a repricing of the tranche B term loans and resetting and amending the test for incremental loans. Following the repricing, the applicable interest rate margin for the tranche B term loans was set at 2.25% for Eurocurrency borrowings and 1.25% for base rate borrowings. On August 24, 2018, the Company repriced the revolving credit loans and secured tranche A term loans under the 2016 Credit Agreement. The repricing reduced the applicable interest rate margin at current levels for the Company’s revolving credit loans by 25 basis points for both LIBOR borrowings and base rate borrowings, increased the amount available under the revolving credit facility from $570.0 million to $720.0 million and provided for an additional tranche A term loan in the amount of $25 million. In addition, the repricing amendment extended the maturity date for the revolving credit facility and tranche A term loan to July 1, 2023, modified the leverage ratios for determining the applicable interest rate on the tranche A term loans and revolving credit loans and modified certain financial covenants, including extending by 1 year (from December 31, 2018 to December 31, 2019) the date on which the consolidated leverage ratio test reduces from 5.00:1.00 to 4.50:1.00, extending by 2 years (from December 31, 2019 to December 31, 2021) the date on which the consolidated leverage ratio test reduces to 4.00:1.00, and adding an interim consolidated leverage ratio test of 4.25:1.00 for a one year period from December 31, 2020 through September 30, 2021. In addition, the amendment modified the definition of specified acquisition to allow the Company to designate, one time, an acquisition involving the payment of consideration in excess of $300 million. Following the repricing, the applicable interest rate margin for the revolving credit loans and tranche A term loans was set at 2.00% for LIBOR borrowings and 1.00% for base rate borrowings. As of September 30, 2018, amounts outstanding under the 2016 Credit Agreement bore interest at a rate equal to the Eurocurrency Rate plus a margin of 2.00% with respect to the revolving credit loans and tranche A term loans and at a rate equal to the Eurocurrency Rate plus a margin of 2.25% with respect to tranche B term loans (with the Eurocurrency Rate subject to a 0.00% floor). As of September 30, 2018 and December 31, 2017, amounts outstanding under the 2016 Credit Agreement bore a weighted average effective interest rate of 4.3 percent and 4.2 percent, respectively. The Company accounted for the January repricing as both a debt extinguishment and debt modification by evaluating the refinancing on a creditor by creditor basis and the August 2018 repricing as a debt modification. During the first quarter of 2018, the Company recorded a loss on extinguishment of debt of $1.1 million related to the write-off of unamortized debt issuance costs. The Company incurred general and administrative expenses of $3.8 million related to third-party costs associated with the repricings. The loss on extinguishment and third-party costs are reflected as financing interest expense and service fees, respectively, within our unaudited condensed consolidated statements of income. In addition, the Company incurred and capitalized $6.1 million of new debt issuance costs related to the repricings. The Company maintains interest rate swap agreements to manage the interest rate risk associated with its outstanding variable-interest rate borrowings under the 2016 Credit Agreement. See Note 7, Derivative Instruments, for further discussion. Debt Covenants As more fully described in the Company’s Annual Report on Form 10–K for the year ended December 31, 2017, the 2016 Credit Agreement and the Indenture contain covenants that limit the ability of the Company and its subsidiaries, including 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. As of September 30, 2018, the Company was in compliance with all material covenants of its 2016 Credit Agreement and the Indenture. Notes Outstanding As of both September 30, 2018 and December 31, 2017, the Company had $400.0 million of 4.75% fixed-rate senior notes outstanding, which will mature on February 1, 2023. Interest is payable semiannually in arrears on February 1 and August 1 of each year. Australian Securitization Facility The Company has renewed a one-year securitized debt agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd., which expires April 2019. Under the terms of the agreement, each month, on a revolving basis, the Company sells certain of its Australian receivables to the Company’s Australian Securitization Subsidiary. The Australian Securitization Subsidiary, in turn, uses the receivables as collateral to issue asset-backed commercial paper (“securitized debt”) for approximately 85 percent of the securitized receivables. The amount collected on the securitized receivables is restricted to pay the securitized debt and is not available for general corporate purposes. The Company pays a variable interest rate on the outstanding balance of the securitized debt, based on the Australian Bank Bill Rate plus an applicable margin. The interest rate was 2.79% and 2.53% as of September 30, 2018 and December 31, 2017, respectively. The Company had $87.9 million and $90.0 million of securitized debt under this facility as of September 30, 2018 and December 31, 2017, respectively. European Securitization Facility On April 7, 2016, the Company entered into a five-year securitized debt agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd. Under the terms of the agreement, the Company sells certain of its receivables from selected European countries to its European Securitization Subsidiary. The European Securitization Subsidiary, in turn, uses the receivables as collateral to issue securitized debt. The amount collected on the securitized receivables is restricted to pay the securitized debt and is not available for general corporate purposes. The amounts of receivables to be securitized under this agreement will be determined by management on a monthly basis. The interest rate was 0.91% and 1.11% as of September 30, 2018 and December 31, 2017, respectively. The Company had $23.7 million and $17.9 million of securitized debt under this facility as of September 30, 2018 and December 31, 2017, respectively. Participation Debt Historically, WEX Bank maintained three separate participation agreements with third-party banks to fund customer balances that exceeded WEX Bank’s lending limit to an individual customer. In June 2018, WEX Bank entered into a fourth participation agreement with a third-party bank to fund an additional customer’s balance. Associated unsecured borrowings carry a variable interest rate of 1 month to 3 month LIBOR plus a margin of 225 basis points. The balance of the debt was approximately $141.0 million and $185.0 million at September 30, 2018 and December 31, 2017, respectively. The outstanding commitment as of September 30, 2018 will mature in amounts of $75.4 million and $50.0 million on December 31, 2018 and August 31, 2020, respectively, with the remaining $15.6 million maturing on demand. Borrowed Federal Funds WEX Bank borrows from lines of credit on a federal funds rate basis to supplement the financing of its accounts receivable. There were no outstanding borrowings as of both September 30, 2018 and December 31, 2017. As of September 30, 2018, the Company’s federal funds available lines of credit was $310.0 million. WEX Latin America Debt WEX Latin America had debt of approximately $7.8 million and $9.7 million as of September 30, 2018 and December 31, 2017, respectively. This is comprised of credit facilities and loan arrangements related to our accounts receivable. The average interest rate was 16.87% and 21.20% as of September 30, 2018 and December 31, 2017, respectively. These borrowings are recorded in short-term debt, net on the Company’s unaudited condensed consolidated balance sheets for the periods presented.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration