Maplebear Inc. entered into a revolving credit agreement, among the company, the lenders party thereto, the issuing banks party thereto, and Morgan Stanley Senior Funding Inc., as administrative agent. The Credit Agreement provides a revolving credit facility in an aggregate principal amount of $500 million, with an uncommitted incremental facility to increase the principal amount of the revolving credit facility by (i) up to the greater of (x) $1,000 million and (y) 100% of consolidated adjusted EBITDA, plus (ii) an unlimited amount provided that the total gross leverage ratio of the company would not exceed 4.00 to 1.00, subject to certain terms and conditions as set forth therein. Proceeds from any borrowings under the Credit Agreement may be used for working capital and general corporate purposes.
At closing, no amounts were drawn under the Credit Agreement. The Credit Agreement is unsecured and is guaranteed by material domestic subsidiaries of the company. Loans under the Credit Agreement may be borrowed, repaid, and reborrowed from time to time until April 30, 2031 (the Maturity Date), at which time all amounts borrowed must be repaid.
The company may request, no more than two times during the term of the Credit Agreement, an extension of the Maturity Date for up to one year per extension. The company may obtain loans denominated in U.S. Dollars, British Pounds, Canadian Dollars, Euros, or other currencies approved in accordance with the Credit Agreement. Loans under the Credit Agreement will bear interest, at the company's election, at a rate equal to (i) for U.S. Dollar loans, Term SOFR plus an applicable margin, or the alternate base rate (determined in accordance with the Credit Agreement) plus an applicable margin; (ii) for Euro loans, the Adjusted EURIBO Rate plus an applicable margin; (iii) for Canadian Dollar loans, Term CORRA plus an applicable margin; or (iv) for British Pounds loans, the Adjusted Daily Simple RFR (SONIA) plus an applicable margin, and in each case, subject to a 0.00% floor.
The applicable margin for Term SOFR loans ranges from 1.00% to 1.50% per annum, and for ABR loans ranges from 0.00% to 0.50% per annum, in each case depending on the company's total net leverage ratio of consolidated debt less unrestricted cash of up to $500 million to consolidated adjusted EBITDA, as measured on a quarterly basis. Upon the occurrence and during the continuance of certain events of default, overdue amounts may bear interest at the otherwise applicable rate plus 2.00% per annum. The company will pay the lenders a commitment fee of 0.10% per annum on the average daily unused amount of the revolving commitments, payable quarterly.
The Credit Agreement also allows the company to issue letters of credit up to an aggregate amount of $150 million, which reduce the amount the company can borrow. The company will also pay each issuing bank a fronting fee of 0.125% per annum on the average daily undrawn amount of letters of credit issued by such issuing bank, plus a letter of credit participation fee equal to the applicable Term SOFR margin on the average daily undrawn amount of all outstanding letters of credit. The Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and events of default.
Negative covenants include, among others, certain limitations on the incurrence of indebtedness, the creation of liens, fundamental changes, restricted payments, investments, and transactions with affiliates, in each case, subject to customary exceptions. In addition, the Credit Agreement requires that the company maintain a total net leverage ratio no greater than 4.50 to 1.00, tested quarterly, subject to an increase to 5.50 to 1.00 for four consecutive fiscal quarters following a material acquisition, at the company's election, which may be exercised no more than three times during the term of the Credit Agreement. Events of default include, among others, failure to pay principal or interest when due, failure to comply with covenants, cross-default and cross-acceleration with respect to other indebtedness in excess of $150 million, certain bankruptcy and insolvency events, unsatisfied final judgments in excess of $150 million, change of control, and certain ERISA events.
The occurrence of an event of default could result in the acceleration of the company's obligations under the Credit Agreement and the termination of the revolving commitments. Bankruptcy and insolvency-related events of default would result in automatic acceleration and termination.
