Transactions considerably strengthen the corporate’s credit score profile by extending near-term maturities and lowering secured debt by $187 million

LANHAM, Md., Jan. 9, 2023 /PRNewswire/ — 2U, Inc. (Nasdaq: TWOU), a number one on-line schooling platform firm, in the present day introduced that it has entered into an settlement to refinance its time period mortgage, extending the maturity date from December 2024 to December 2026, and amending different phrases. In reference to amending and increasing the time period mortgage, the corporate has entered into agreements to safe roughly $127 million of recent capital from Greenvale Capital LLP, a present stockholder of the corporate, and The Berg Household Belief, within the type of $147 million in principal quantity of 4.50% Senior Unsecured Convertible Notes due 2030 (the “Notes”). The corporate intends to make use of money from its steadiness sheet and the proceeds from the issuance of the Notes to scale back secured time period mortgage debt by $187 million to $380 million. The mix of diminished secured debt and prolonged maturities will considerably strengthen the corporate’s credit score profile. The closing of the Notes and the refinancing are topic to customary closing circumstances.

This refinancing represents a big milestone for the corporate and is a testomony to the power of the enterprise and its monetary place. The corporate believes the improved monetary profile will present it with the flexibleness and sources it must proceed to thrive and succeed within the market.

Amended and Prolonged Time period Mortgage

The amended and prolonged time period mortgage facility bears curiosity at a fee of the Time period SOFR (with a flooring of 0.75%) plus 6.5%. The mortgage has an authentic difficulty low cost of 95 and an annual amortization of 1.0%. The amended credit score settlement accommodates customary circumstances to borrowing, occasions of default, and covenants—together with covenants that limit the corporate’s capacity to incur further indebtedness, grant liens, make investments and acquisitions, pay dividends, repurchase fairness pursuits within the firm, and enter into affiliate transactions and asset gross sales.

Revolver

As a part of the refinancing transaction, along with extending the maturity date, the lenders have agreed to offer the corporate with a senior secured first lien revolving mortgage facility within the principal quantity of $40 million.

4.50% Senior Unsecured Convertible Notes due 2030

The conversion fee for the Notes will initially be 111.1111 shares of the corporate’s widespread inventory per $1,000 principal quantity of Notes, which is equal to an preliminary conversion value of $9.00 per share of widespread inventory. The preliminary conversion value of the Notes represents a conversion premium of roughly 40% to the closing value of the corporate’s widespread inventory on January 6, 2023.

Extra details about the transactions will be discovered within the present report on Type 8-Okay filed by the corporate with the SEC in the present day and obtainable on the corporate’s Investor Relations web site.

“We’re excited to start out 2023 with this necessary first step to optimize our steadiness sheet,” mentioned 2U Chief Monetary Officer Paul Lalljie. “The transactions introduced in the present day will present us with the flexibleness to execute on our platform technique and additional strengthen our international market place. We’re grateful for the help we have obtained from our lenders and Greenvale all through this course of, which we consider is an indicator of the monetary neighborhood’s confidence in our enterprise. At the moment, we’re working as a leaner, extra agile firm that continues to be absolutely centered on delivering money circulation and profitability.”

Mr. Lalljie continued, “We proceed to see returns from our platform technique and the implementation of our Strategic Realignment Plan. Consequently, in the present day we affirm the full-year 2022 steering we supplied on our November 7, 2022 earnings name and reiterate the 2023 adjusted EBITDA goal supplied on that decision, as we proceed to execute on our platform technique.”

This press launch doesn’t and shall not represent a proposal to promote or the solicitation of a proposal to purchase any notes or shares of the corporate’s widespread inventory, nor shall there be any supply, solicitation or sale of notes or such widespread inventory in any state or jurisdiction wherein such a proposal, solicitation or sale could be illegal previous to registration or qualification below the securities legal guidelines of any such state or jurisdiction.

Morgan Stanley and Goldman Sachs served as Joint-Lead Arranger, Joint Bookrunner on the Time period Mortgage and Revolving Credit score Services; ICR Capital LLC served as a monetary advisor to 2U with respect to the Notes. Paul Hastings LLP served as authorized counsel to 2U with respect to the Credit score Services and Notes; Holland & Knight LLP served as counsel to Greenvale on the Notes; Shearman & Sterling LLP acted as authorized counsel to the Lead Arrangers.

About 2U, Inc. (Nasdaq: TWOU)

Because the guardian firm of edX, a number one international on-line studying platform, 2U gives over 46 million learners with entry to world-class schooling in partnership with greater than 230 faculties, universities, and firms. Our individuals and expertise are powering greater than 4,000 digital schooling choices — from free programs to full levels — and serving to unlock human potential. To be taught extra: go to 2U.com.

Ahead-Wanting Statements

This press launch accommodates forward-looking statements concerning the refinancing transactions and the notes providing, that are topic to the secure harbor provisions of the Personal Securities Litigation Reform Act of 1995. All statements aside from statements of historic information contained on this press launch, together with statements concerning the impression of the refinancing transactions on the corporate’s future monetary place, future liquidity and market place, the anticipated use of the online proceeds from the providing, are forward-looking statements. The corporate has based mostly these forward-looking statements on its present expectations and projections about future occasions as of the date of this press launch. The corporate undertakes no obligation to replace these statements because of new data or future occasions. These forward-looking statements are topic to plenty of dangers, uncertainties and assumptions that would trigger precise outcomes to vary materially from the outcomes predicted, together with, however not restricted to, dangers associated to the providing of the notes and the consummation of the refinancing transactions. These and different potential dangers and uncertainties that would trigger precise outcomes to vary from the outcomes predicted are extra absolutely detailed below the heading “Danger Components” within the firm’s Annual Report on Type 10-Okay for the 12 months ended December 31, 2021 and different filings with the Securities and Alternate Fee. Furthermore, the corporate operates in a really aggressive and quickly altering surroundings. New dangers emerge occasionally. It’s not potential for firm administration to foretell all dangers, nor can the corporate assess the impression of all components on its enterprise or the extent to which any issue, or mixture of things, could trigger precise outcomes to vary materially from these contained in any forward-looking statements the corporate could make. In gentle of those dangers, uncertainties and assumptions, the forward-looking occasions and circumstances mentioned on this press launch could not happen and precise outcomes might differ materially and adversely from these anticipated.

Contact Data

Media Contact: [email protected]

Investor Relations Contact: [email protected]

SOURCE 2U, Inc.