AppLovin Risk After IPO Has Essentially Unfettered Flexibility

After completing their IPO on April 19, 2021, Applovin risk under their credit agreements has become a highly discussed topic. The software company was provided with a $1.82B term loan and a $600M revolving credit facility, both maturing in 2025 initiating our Americas Covenants team to analyze the company’s credit agreement. Our experts highlighted two covenant concepts that add to Applovin risk for investors including the aggregate basket inconsistencies and the consequences of these inconsistencies as well as the potential impact of allowing all structurally senior debt to be secured by the assets of non guarantor restricted subsidiaries. Furthermore, the Applovin credit agreement may allow for unrestrained flexibility for the company and the company is not currently limited on paying dividends to unrestricted subsidiaries.   

Read our Americas Covenants team’s full analysis of the Applovin risk as well as our analysis of the company’s aggregate basket inconsistencies, secured structurally senior debt, flexibility under the credit agreement and lender protections and aggressive terms under the credit agreement here: https://reorg.com/applovin-ipo/