top of page’s Credit Cut Off, Expects More Debt Covenant Violations

Artificial intelligence firm gets waiver after debt covenant violation but expects to run afoul again.

August 20, 2022

As of June 30, 2022 Holdings (BBAI), an artificial intelligence (AI) and machine learning platform, was not in compliance with the Fixed Charge Coverage ratio requirement of its credit agreement with Bank of America. For two weeks the company was not able to draw on the facility. Though the bank waived the Fixed Charge Coverage requirement for a time, the company expects more trouble ahead.

In its latest quarterly filing, revealed that it expects to run afoul of the aforementioned debt covenant again resulting in the company not being allowed to draw on the facility in the future:

“Based on current forecasts, management believes that it is reasonably likely that the Company may fail to meet the covenant requirements of the Bank of America Credit Agreement in future periods and therefore, may be unable to draw on the facility.”


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