LendingTree enters $475 million loan agreement with Bank of America and Truist

LendingTree, Inc. (NASDAQ:TREE), currently valued at $861 million in market capitalization, announced Thursday that it has entered into a $475 million first lien term loan facility with Bank of America, N.A., as administrative agent, and Bank of America, N.A. and Truist Securities, Inc., as joint lead arrangers. The facility consists of $400 million in initial term loans and $75 million in revolving loans, provided by a syndicate of banks arranged by Bank of America and Truist. According to InvestingPro analysis, while the company isn’t currently profitable, analysts expect net income growth this year, making this refinancing particularly significant for its future operations.

The new loan facility has a five-year maturity. Interest on the initial term loans will be charged at SOFR plus 450 basis points, with a possible 25-basis point reduction if the company achieves a corporate family rating of B2 (stable) or better from Moody’s. The revolving loans will carry an interest rate of SOFR plus 350 basis points.

According to a company statement based on the SEC filing, proceeds from the facility will be used to refinance LendingTree’s existing credit facilities with Truist and Apollo, as well as for working capital and general corporate purposes.

The agreement includes a financial covenant requiring LendingTree to maintain a first lien net leverage ratio of no more than 5.0 times, tested quarterly when the revolving loan is drawn in an amount equal to or greater than $20 million, excluding undrawn or cash-collateralized letters of credit.

Mandatory prepayment provisions are included in the agreement. These include an asset sale sweep subject to a $50 million threshold with reinvestment rights, an excess cash flow sweep of 50% beginning with the fiscal year ending December 31, 2026—stepping down to 25% if the first lien leverage ratio falls below 3.0 times and to 0% if below 2.5 times, subject to a minimum threshold—and a debt issuance sweep of 100%.

The facility is secured by a lien on substantially all assets of LendingTree and its material subsidiaries, subject to certain exceptions. The agreement also contains standard negative covenants, such as limitations on additional debt, creation of liens, investments, dispositions, and restricted payments.

This information is based on a press release statement included in LendingTree’s SEC filing.

In other recent news, LendingTree, Inc. reported a robust performance for the second quarter of 2025, significantly exceeding earnings expectations. The company achieved an earnings per share of $1.13, surpassing the anticipated $0.35, which represents a 222.86% surprise. Revenue also exceeded forecasts, reaching $250 million compared to the predicted $244.03 million, marking a 2.49% surprise. Truist Securities responded to these strong results by raising its price target for LendingTree to $62.00 while maintaining a Buy rating. In addition to the earnings news, Moody’s Ratings affirmed LendingTree’s B3 Corporate Family Rating and upgraded its Probability of Default Rating to B3-PD. The outlook was also revised to positive from stable. Furthermore, Moody’s assigned B3 ratings to LendingTree’s planned new Senior Secured First Lien Bank Credit Facilities. These recent developments highlight LendingTree’s positive financial trajectory and improved credit outlook.

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