What was the weighted average interest rate on the total amount outstanding for the Aplus Credit Facility as of December 31, 2023?

According to Aplus's 2024 Franchise Disclosure Document, the weighted average interest rate on the total amount outstanding for its Credit Facility as of December 31, 2023, was 7.54%. The balance on the Credit Facility was $411 million, with an additional $5 million in standby letters of credit outstanding. The unused availability on the Credit Facility was $1.084 billion.

This information is relevant to potential Aplus franchisees because it provides insight into the financial health and borrowing costs of the parent company. A high interest rate could indicate higher risk or less favorable borrowing terms for Aplus, which could indirectly affect franchisees. Conversely, compliance with financial covenants suggests financial stability.

The document also states that the Credit Facility is secured by a security interest in the Partnership's personal property, the personal property of its guarantors, the capital stock of its material subsidiaries, and any intercompany debt. This security arrangement is typical for large credit facilities and provides lenders with collateral in case of default. The security interests will be released upon Aplus achieving an investment-grade credit rating.

Furthermore, the Partnership's net leverage ratio was 3.66 to 1.00 at the end of 2023. This ratio is a measure of Aplus's debt relative to its equity and is an indicator of financial leverage. A higher ratio indicates greater reliance on debt financing. Franchisees may want to monitor these financial metrics to assess the ongoing financial stability of Aplus.