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Financing and Other Debt | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
Financing and Other Debt |
10. | Financing and Other Debt
The following tables summarize the Company’s total outstanding debt as of June 30, 2024 and December 31, 2023.
| As of June 30, 2024 |  | As of December 31, 2023
(in millions) | Balance Outstanding |  | Interest Rate |  | Balance Outstanding |  | Interest Rate
Short term debt: |  |  |  |  |  |  |
Securitized debt | $ | 100.4 |  |  | 5.77 | % |  | $ | 101.9 |  |  | 5.85 | %
Participation debt | 27.0 |  |  | 7.59 | % |  | 39.1 |  |  | 7.62 | %
FHLB advances | 300.0 |  |  | 5.50 | % |  | — |  |  | — | %
Borrowed federal funds | 760.0 |  |  | 4.76 | % |  | 845.0 |  |  | 4.89 | %
Other short term borrowings | 8.7 |  |  | 6.15 | % |  | — |  |  | — | %
Current portion of long-term debt(6) | 52.6 |  |  | ** |  | 55.1 |  |  | **
Total short term debt, net | $ | 1,248.6 |  |  |  |  | $ | 1,041.1 |  |  |
** Provided for the total Amended and Restated Credit Agreement borrowings below.
| Balance Outstanding at:
(in millions) | June 30, 2024 |  | December 31, 2023
Long-term debt: |  |  |
Amended and Restated Credit Agreement(4): |  |  |
Term A Loans due April 2026(1) | $ | — |  |  | $ | 843.9 |
Term A-1 Loans due May 2029(1) | 888.8 |  |  | — |
Term B Loans due April 2028(2) | — |  |  | 1,402.3 |
Term B-1 Loans due April 2028(3) | 1,395.1 |  |  | — |
Borrowings on Revolving Credit Facility due May 2029(1) | 756.3 |  |  | 662.0 |
Total long-term debt(5) | 3,040.2 |  |  | 2,908.2 |
Less total unamortized debt issuance costs/discounts | (27.9) |  |  | (25.6) |
Less current portion of long-term debt(6) | (52.6) |  |  | (55.1) |
Long-term debt, net | $ | 2,959.6 |  |  | $ | 2,827.5 |
(1)Bears interest at variable rates, at the Company’s option, plus an applicable margin determined based on the Company’s consolidated leverage ratio. Outstanding borrowings under the Revolving Credit Facility are classified as long-term given they can be rolled forward with interest rate resets through maturity. (2)Bore interest at variable rates, at the Company’s option, plus an applicable margin, which was fixed at 1.25 percent for base rate borrowings and 2.25 percent with respect to Term SOFR borrowings. (3)Bears interest at variable rates, at the Company’s option, plus an applicable margin, which is fixed at 1.00 percent for base rate borrowings and 2.00 percent with respect to Term SOFR borrowings. (4)As of June 30, 2024 and December 31, 2023, amounts outstanding under the Amended and Restated Credit Agreement bore a weighted average effective interest rate of 7.1 percent and 7.3 percent, respectively. (5)See Note 13, Financial Instruments − Fair Value and Concentrations of Credit Risk for information regarding the fair value of the Company’s debt. (6)Current portion of long-term debt as of June 30, 2024 and December 31, 2023 is net of $6.8 million and $8.3 million, respectively, in unamortized debt issuance costs/discounts.
(in millions) | June 30, 2024 |  | December 31, 2023
Supplemental information under Amended and Restated Credit Agreement: |  |  |
Letters of credit(1) | $ | 39.3 |  |  | $ | 36.8 |
Remaining borrowing capacity on Revolving Credit Facility(2) | $ | 804.4 |  |  | $ | 731.2 |
(1)Primarily collateralizing Corporate Payments processing activity. (2)Borrowing capacity is contingent on maintaining compliance with the financial covenants as defined in the Company’s Amended and Restated Credit Agreement. As of June 30, 2024, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.25 percent to 0.45 percent of the daily unused portion of the Revolving Credit Facility determined based on the Company’s consolidated leverage ratio. Prior to May 10, 2024, the quarterly commitment fee ranged from 0.25 percent to 0.50 percent. The quarterly commitment fee in effect as of June 30, 2024 and December 31, 2023 was 0.25 percent. Amended and Restated Credit Agreement As of December 31, 2023, under the Amended and Restated Credit Agreement, we had senior secured tranche A term loans (the “Term A Loans”), senior secured tranche B term loans (the “Term B Loans”) and revolving credit commitments under the Revolving Credit Facility. On January 22, 2024, the Company and certain of its subsidiaries entered into the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”), which amended certain terms of the Amended and Restated Credit Agreement, as in effect prior to January 22, 2024, including without limitation to reprice the Term B Loans existing on January 22, 2024 through the issuance of new senior secured tranche B term loans (the “Term B-1 Loans”) in the same amount. The Term B-1 Loans bear interest at variable rates at the Company’s option, plus an applicable margin, which is fixed at 1.00 percent for base rate borrowings and 2.00 percent with respect to Term SOFR borrowings, representing a reduction from the fixed applicable margins of 1.25 percent and 2.25 percent respectively, for Term B Loans. Additionally, the Fourth Amendment removed the credit spread adjustment applicable to the tranche B term loans which are SOFR borrowings. No other substantive changes were made to the Amended and Restated Credit Agreement as part of the Fourth Amendment. On May 10, 2024, the Company and certain of its subsidiaries entered into the Fifth Amendment to the Amended and Restated Credit Agreement (the “Fifth Amendment”) and First Amendment to U.S. Security Agreement. The Fifth Amendment amended certain terms of the Amended and Restated Credit Agreement, as in effect prior to May 10, 2024, including without limitation to reprice the applicable interest margin, extend the maturity date of the tranche A term loans to May 10, 2029 and increase the size of the tranche A term loan facility to $900.0 million through the issuance of new senior secured tranche A term loans (the “Term A-1 Loans”). Further, the Fifth Amendment increased commitments under the Revolving Credit Facility to $1.6 billion, repriced the applicable interest margin for the Revolving Credit Facility, and extended the maturity date to May 10, 2029 for the Revolving Credit Facility. Convertible Notes The Company previously had issued Convertible Notes in an aggregate principal amount of $310.0 million to an affiliate of Warburg Pincus LLC. Interest on the Convertible Notes was calculated at a fixed rate of 6.5 percent per annum, payable semi-annually in arrears on January 15 and July 15 of each year. On August 11, 2023, the Company repurchased all of the outstanding $310.0 million aggregate principal amount of the Company’s Convertible Notes at 119 percent of par for a total purchase price of $370.4 million, inclusive of accrued and unpaid interest. At the time of repurchase, the net carrying amount of the Convertible Notes was $298.8 million, resulting in a loss on extinguishment of $70.1 million, which was recorded within nonoperating expense on the condensed consolidated statement of operations during the third quarter of 2023. Upon repurchase, the obligations of the Company to Warburg Pincus LLC were satisfied in full and the Convertible Notes were canceled by the trustee at the instruction of the Company. During the three and six months ended June 30, 2023, the Company recognized interest expense of $5.6 million and $11.3 million, respectively. Securitization Facilities Under securitized debt agreements, each month on a revolving basis, the Company sells certain of its Australian and European receivables to bankruptcy-remote subsidiaries consolidated by the Company, which in turn use the receivables as collateral to issue securitized debt. Amounts collected on the securitized receivables are restricted to pay the securitized debt and are not available for general corporate purposes. The Company pays interest on the outstanding balance of the securitized debt based on variable interest rates plus an applicable margin. The Company’s securitized debt agreement for the securitization of its European receivables is with MUFG Bank, Ltd., has a maximum revolving borrowing limit of €55.0 million and expires in April 2025, unless otherwise agreed to in writing by the parties. The Company’s securitized debt agreement for the securitization of its Australian receivables is with Australia and New Zealand Banking Group Limited, has a maximum revolving borrowing limit of A$140.0 million, expires in October 2024 and is annually renewable thereafter unless earlier terminated. Participation Debt From time to time, WEX Bank enters into participation agreements with third-party banks to fund customers’ balances that exceed WEX Bank’s lending limit to individual customers. Associated unsecured borrowings generally carry a variable interest rate set according to an applicable reference rate plus a margin, which was 2.25 percent as of June 30, 2024. As of June 30, 2024, the Company has an outstanding participation agreement which allows for total borrowings of up to $70.0 million and expires in December 2025, unless otherwise agreed to in writing by the parties. Borrowings under the participation agreement are included in short-term debt given they may be canceled by either party upon 60 days’ advance written notice. FHLB Advances WEX Bank is a member of the Federal Home Loan Bank (FHLB) of Des Moines, which provides WEX Bank short-term funding collateralized by investment securities. FHLB short-term advances bear interest at variable rates. WEX Bank was eligible to borrow up to $337.6 million from the FHLB as of June 30, 2024 based on collateral provided, $300.0 million of which was borrowed and outstanding at that date. Borrowed Federal Funds The BTFP, which provided liquidity to U.S. depository institutions through the offering of bank loans for up to one year in length collateralized by the par value of qualifying assets, ceased extending new loans on March 11, 2024. As of June 30, 2024, WEX Bank had $760.0 million in outstanding borrowings under the BTFP due in January of 2025 with an interest rate of 4.76 percent. As of December 31, 2023, WEX Bank had $775.0 million in outstanding borrowings under the BTFP with an interest rate of 4.84 percent. WEX Bank borrows from short-term uncommitted federal funds lines of credit extended by various financial institutions to supplement the financing of the Company’s accounts receivable. WEX Bank had no borrowings outstanding under these federal funds lines of credit as of June 30, 2024 and $70.0 million in outstanding borrowings as of December 31, 2023. Other Short Term Borrowings Under an uncommitted borrowing facility, WEX Australia can be advanced up to A$21.3 million from Bank of America in short-term funds. Interest accrues on any advances at a rate fixed for each interest period of 1.80 percent above the Australian Bank Bill Buying Rate for that interest period. Other As an additional source of liquidity, WEX Bank had pledged $231.4 million as of June 30, 2024 of customer 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 and were $141.6 million as of June 30, 2024. WEX Bank had no borrowings outstanding on this line of credit through the Federal Reserve Bank Discount Window as of June 30, 2024 and December 31, 2023.

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- 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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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