WEX Inc.WEX
WEX Inc. Debt Disclosure
| 16. | Financing and Other Debt | ||||
The following tables summarize the Company’s total outstanding debt as of:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (in millions) | Balance Outstanding | Interest Rate | Balance Outstanding | Interest Rate | |||||||||||||||||||
| Short term debt: | |||||||||||||||||||||||
| Securitized debt (VIEs) | $ | 101.4 | 4.68 | % | $ | 86.8 | 5.58 | % | |||||||||||||||
| Participation debt | 65.2 | 5.94 | % | 49.2 | 6.58 | % | |||||||||||||||||
| FHLB advances | 1,105.0 | 3.87 | % | 1,105.0 | 4.63 | % | |||||||||||||||||
Current portion of long-term debt(6) | 54.7 | ** | 52.1 | ** | |||||||||||||||||||
| Total short term debt, net | $ | 1,326.4 | $ | 1,293.2 | |||||||||||||||||||
** Provided for the total Credit Agreement borrowings below.
| Balance Outstanding at: | |||||||||||
| (in millions) | December 31, 2025 | December 31, 2024 | |||||||||
| Long-term debt: | |||||||||||
| Credit Agreement: | |||||||||||
Term A-1 Loans(1) | $ | 821.3 | $ | 866.3 | |||||||
Term B-2 Loans due April 2028(2) | 1,374.4 | 1,388.3 | |||||||||
Term B-3 Loans due March 2032(2) | 446.6 | — | |||||||||
Borrowings on Revolving Credit Facility(1) | 428.4 | 905.6 | |||||||||
Total borrowings under the Credit Agreement(3) | 3,070.7 | 3,160.2 | |||||||||
| Senior Notes due March 15, 2033 | 550.0 | — | |||||||||
Total long-term debt(4) | 3,620.7 | 3,160.2 | |||||||||
| Less total unamortized debt issuance costs/discounts | (33.9) | (25.9) | |||||||||
Less current portion of long-term debt(5) | (54.7) | (52.1) | |||||||||
| Long-term debt, net | $ | 3,532.0 | $ | 3,082.1 | |||||||
(1)The maturity date of each of the Term A-1 Loans and Revolving Credit Facility is the earlier of (i) May 10, 2029 and (ii) the date that is 91 days prior to the maturity of the Term B-2 Loans, as further described in the Credit Agreement. The Term A-1 Loans and Revolving Credit Facility bear 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)Bears interest at variable rates, at the Company’s option, plus an applicable margin, which is fixed at 0.75 percent for base rate borrowings and 1.75 percent with respect to Term SOFR borrowings.
(3)As of December 31, 2025 and 2024, amounts outstanding under the Credit Agreement bore a weighted average effective interest rate of 5.5 percent and 6.0 percent, respectively.
(4)See Note 18, Fair Value for information regarding the fair value of the Company’s debt.
(5)Current portion of long-term debt as of December 31, 2025 and 2024 is net of $8.7 million and $6.9 million, respectively, in unamortized debt issuance costs/discounts.
| December 31, 2025 | December 31, 2024 | ||||||||||
| Supplemental information under Credit Agreement: | |||||||||||
Letters of credit(1) | $ | 44.5 | $ | 39.2 | |||||||
Remaining borrowing capacity on Revolving Credit Facility(2) | $ | 1,127.1 | $ | 655.2 | |||||||
(1)Primarily collateralizing Corporate Payments processing activity.
(2)Total commitments under the Revolving Credit Facility are $1.6 billion as of both December 31, 2025 and 2024. Borrowing capacity is contingent on maintaining compliance with the financial covenants as defined in the Company’s Credit Agreement. 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. The quarterly commitment fee in effect as of December 31, 2025 and 2024 was 0.30 percent and 0.25 percent, respectively.
Credit Agreement
As of December 31, 2024, under the Credit Agreement, the Company had senior secured tranche A term loans (the “Term A Loans”), senior secured tranche B term loans (the “Term B Loans”), and outstanding commitments under the Revolving Credit Facility.
On March 6, 2025, the Company and certain of its subsidiaries entered into the Seventh Amendment to the Credit Agreement (the “Seventh Amendment”), which, among other things, established an incremental tranche of senior secured tranche B term loans in an aggregate principal amount of $450.0 million (the “Incremental Term B-3 Loans”), which are scheduled to mature on March 6, 2032 and were issued with 0.5 percent OID. The proceeds from the Incremental Term B-3 Loans were primarily used to fund the Tender Offer and to repay a portion of the Company’s outstanding borrowings on the Revolving Credit Facility. See Note 5, Repurchases of Common Stock, for more information on the Tender Offer.
The Company incurred debt financing costs of approximately $4.9 million in conjunction with the Seventh Amendment, in addition to the OID of $2.3 million. The OID and debt financing costs are being amortized over the term of the borrowing to financing interest expense, net of financial instruments.
Under the Credit Agreement, the Company has granted a security interest in substantially all of the assets of the Company, subject to certain exceptions including the assets of WEX Bank and certain foreign subsidiaries. The Credit Agreement contains various affirmative and negative covenants affecting the Company and its subsidiaries, including covenants limiting the Company’s ability to, among other things, incur debt, grant liens, make certain investments, pay dividends, repurchase equity interests and sell assets, subject to certain exceptions. The Credit Agreement also contains customary financial maintenance covenants, including a consolidated interest coverage ratio and a consolidated leverage ratio.
Senior Notes
On March 6, 2025, the Company completed a private offering of $550.0 million in aggregate principal amount of senior unsecured notes due March 15, 2033 (the “Senior Notes”). The Senior Notes bear interest at a rate of 6.5 percent per annum, payable semi-annually. The proceeds from the Senior Notes were primarily used to fund the Tender Offer discussed above under Credit Agreement and to repay a portion of the Company’s outstanding borrowings under the Revolving Credit Facility. Subject to the conditions set forth in the Indenture, the Senior Notes may be redeemed at the Company’s option, in whole or in part, at the following redemption prices:
| Redemption Period Price | |||||
| Prior to March 15, 2028 | 106.500 | % | |||
| March 15, 2028 - March 14, 2029 | 103.250 | % | |||
| March 15, 2029 - March 14, 2030 | 101.625 | % | |||
| After March 15, 2030 | 100.000 | % | |||
The Company incurred debt financing costs of approximately $9.2 million in connection with the Senior Notes offering. The debt financing costs are being amortized over the term of the borrowing to financing interest expense, net of financial instruments.
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. On August 11, 2023 (the “Repurchase Date”), the Company repurchased all of the outstanding 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 has been recorded within non-operating expense on the consolidated statement of operations for the year ended December 31, 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.
The debt discount and debt issuance costs associated with the Convertible Notes were amortized to interest expense using the effective interest rate method over the initial seven-year contractual life of the Convertible Notes. During 2023, through the date of repurchase, the Convertible Notes had an effective interest rate of 7.5 percent.
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. At the Company’s option, interest was either payable in cash, through accretion to the principal amount of the Convertible Notes, or a combination of cash and accretion. From inception and through the Repurchase Date, all interest payments due on the Convertible Notes were paid in cash. The following table sets forth total interest expense recognized for the Convertible Notes during the year ended December 31, 2023:
| (in millions) | |||||
Interest on 6.5% coupon | $ | 12.4 | |||
| Amortization of debt discount and debt issuance costs | 1.5 | ||||
| $ | 13.9 | ||||
Securitization Debt (VIEs)
Under securitized debt agreements, each month on a revolving basis, the Company sells certain of its Australian and European receivables to bankruptcy-remote entities that are VIEs consolidated by the Company, which in turn use the receivables as collateral to issue securitized debt. Amounts collected on the securitized receivables, including approximately $7.1 million of cash and cash equivalents as of December 31, 2025 and an immaterial amount of cash and cash equivalents as of December 31, 2024, are restricted to pay the securitized debt and are not available for general corporate purposes. Additionally, creditors of the VIEs do not have financial recourse to WEX Inc. 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 2026, unless otherwise agreed to in writing by the parties. The Company’s securitized debt facility for the securitization of its Australian receivables is with Australia and New Zealand Banking Group Limited, has a varying borrowing limit by month, ranging from a low of A$100.0 million to a high of A$115.0 million, expires in October 2026, 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 both December 31, 2025 and 2024.
As of December 31, 2025, the Company had an outstanding participation agreement that allows for total borrowings of up to $70.0 million and expires in December 2026, 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. WEX Bank had $1.1 billion of collateralized borrowings outstanding with the FHLB as of December 31, 2025 and 2024. Remaining borrowing capacity as of December 31, 2025 was $383.5 million based on collateral provided as of that date.
Borrowed Federal Funds
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. Federal funds lines of credit were $431.0 million as of December 31, 2025. WEX Bank had no outstanding borrowings under these federal funds lines of credit as of December 31, 2025 and 2024.
Other Short-Term Borrowings
As an additional source of liquidity, WEX Bank pledged $204.1 million as of December 31, 2025 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 $151.0 million and $137.7 million as of December 31, 2025 and 2024, respectively. WEX Bank had no borrowings outstanding on this line of credit as of December 31, 2025 and 2024.
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. The Company had no borrowings outstanding on this facility as of December 31, 2025 and 2024.
Debt Commitments
The table below summarizes the Company’s annual principal payments on its total debt for each of the next five years based on stated maturity dates:
| (in millions) | |||||
| 2026 | $ | 1,335.0 | |||
| 2027 | $ | 63.4 | |||
| 2028 | $ | 1,396.1 | |||
| 2029 | $ | 1,119.2 | |||
| 2030 | $ | 4.5 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 6, 2017 | |
| 2015 | Feb 26, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.