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Note 7 - Syndicated Revolver
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. Syndicated Revolver

 

2023 Credit Facility
 
On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto (the “Lenders”), to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”). The Borrowers may request an increase to the Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00. In connection with the 2023 Credit Facility, the Company incurred $0.9 million of fees paid to the Lenders and $0.3 million of legal fees related to the debt issuance. These fees have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the 2023 Credit Agreement.
 
On September 8, 2025, the Borrowers entered into a one-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extends the term of the 2023 Credit Agreement through September 22, 2027. The material terms of the 2023 Credit Agreement remain unchanged; however, the Extension Agreement amends certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees have been reflected as reduction to the carrying amount of the loan payable and will be amortized over the extended term from September 2026 to September 2027.
 
During the three months ended September 30, 2025 and September 30, 2024,  the Company made repayments of $2.5 million and $2.5 million, respectively, on the 2023 Credit Facility. During the nine months ended September 30, 2025 and September 30, 2024,  the Company made repayments of $5.0 million and $14.5 million, respectively,  on the 2023 Credit Facility.   
 

2023 Credit Facility Terms

 

The 2023 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2023 Credit Agreement requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than 3.75:1.00; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00:1.00. The required principal repayment of $190.4 million is due in September 2027.

 

During the three and nine months ended September 30, 2025, and the three and nine months ended September 30, 2024 the Company was in compliance with the covenants under its credit agreements in effect at the time. During the three and nine months ended September 30, 2025 and September 30, 2024, the Company recognized $0.1 million, $0.1 million, $0.4 million and $0.4 million of interest expense related to the amortization of the debt issuance costs of the 2023 Credit Facility, respectively.

 

Borrowings under the 2023 Credit Facility will accrue interest and standby fees based on the Company's Total Funded Debt to Adjusted EBITDA ratio and the availment type as follows: 

 

   

If Total Funded Debt to EBITDA is:

  

Availment type or fee

  

Less than 2.00

    

Greater than or equal to 2.00 and less than 2.75

    

Greater than or equal to 2.75 and less than 3.50

    

Greater than or equal to 3.50 and less than 3.75

  

Canadian dollar borrowings based on the Canadian overnight repo rate average or U.S. dollar borrowings based on SOFR and letter of credit fees (Margin)

     1.50 %     2.00 %     2.50 %     3.00 %

Canadian borrowings based on Prime Rate or Canadian or U.S. dollar borrowings based on Base Rate (Margin)

     0.25 %     0.75 %     1.25 %     1.75 %

Standby fees

     0.30 %     0.40 %     0.50 %     0.60 %

 

The following table summarizes the Tucows businesses excluding Ting's borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars): 

 

   

September 30, 2025

    

December 31, 2024

  
                 

Principal

   $ 190,400     $ 195,400  

Less: unamortized debt discount and issuance costs

     (980 )     (974 )

Syndicated Revolver, long-term portion

   $ 189,420     $ 194,426