Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 136

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 136
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 our ability, and that of our restricted subsidiaries, to undertake certain actions. These restrictions include limitations on incurring additional debt and liens, issuing redeemable and preferred stock, paying dividends and distributions, making loans and investments, and consolidating, merging, or selling all or substantially all of our assets.Securitization facility – In March 2024, Deluxe Receivables LLC, a wholly-owned subsidiary, established a receivables financing agreement (the “Securitization Facility”). This agreement terminates in March 2027, unless extended per its terms. The maximum borrowing capacity under the Securitization Facility is $80,000, subject to certain borrowing base adjustments. Under this agreement, we have sold and will continue to automatically sell certain accounts receivable to the subsidiary, which serve as collateral for borrowings under the facility and which totaled approximately $117,000 as of December 31, 2024. Borrowings 

77

DELUXE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)

accrue interest at a commercial paper rate for borrowings funded by a conduit lender through the issuance of notes, and for other borrowings, at the Secured Overnight Financing Rate plus an applicable margin. Also, a commitment fee is charged on the unused portion of the facility. Interest and fees are payable monthly. As of December 31, 2024, $78,917 was outstanding under the facility at an interest rate of 6.22%. The proceeds from these borrowings were used to prepay amounts due under our former secured term loan facility.The Securitization Facility is treated as a collateralized financing activity rather than a sale of assets. Consequently, the subsidiary is consolidated, and the receivable balances pledged as collateral are reported as accounts receivable on the consolidated balance sheet, while the borrowings are classified as long-term debt. Cash receipts from the underlying receivables are reflected as operating cash flows on the consolidated statement of cash flows, and borrowings and repayments under the collateralized loans are reflected as financing cash flows.

NOTE 14: LEASES

We have entered into operating leases for the majority of our facilities, with remaining terms extending up to 10 years as of December 31, 2024. These leases allow us to mitigate risks associated with property ownership, such as real estate price fluctuations, and provide us with greater flexibility in managing our real estate needs. Additionally, we have operating leases for certain equipment,