LONG-TERM DEBT AND LINES OF CREDIT

3 Months Ended

Mar. 31, 2026

The Company had the following outstanding amounts of long-term debt (In millions):


	March 31, 2026	December 31, 2025
Long-term debt and lines of credit:
Asset based revolving credit facility, bearing interest at a rate of 4.80%, secured by equipment and other current assets .................................................	$999	$1,196
Senior Secured Second Lien Notes bearing interest at a rate of 9.00% ................	1,034	1,034
Senior Secured Second Lien Notes bearing interest at a rate of 8.625% ..............	600	600
Senior Secured Second Lien Notes bearing interest at a rate of 8.00% ................	500	500
Notes payable to various institutions, bearing interest at rates ranging from 3.75% to 5.10%, maturing through 2029, secured by specific equipment .......	2	2
Equipment financing lines of credit with various institutions, bearing interest at rates ranging from 5.30% to 12.63%, maturing through 2025 ........................	4	3
Total long-term debt and lines of credit ....................................................................	3,139	3,335
Less: original issue discounts ....................................................................................	(19)	(22)
Less: debt issuance costs ...........................................................................................	(38)	(41)
	3,082	3,272
Less: current maturities .............................................................................................	(5)	(4)
Long-term debt and lines of credit, net of current portion, original issue discounts, and debt issuance costs ..........................................................................................	$3,077	$3,268

ABL Credit Facility

During 2021, the Company entered into an asset-based lending facility (the “ABL Facility”). On November 26,

2025, the Company refinanced existing borrowings under the ABL Facility by entering into a new senior secured

asset-based revolving credit facility (the “ABL Credit Facility”). The ABL Credit Facility has a maturity date of

November 26, 2030. The ABL Credit Facility provides available “borrowing capacity” (the maximum borrowing

permitted, assuming there is sufficient collateral as identified under the ABL Credit Facility) up to $2.75 billion.

Borrowings under the ABL Credit Facility bear interest at a rate (at the Company’s election) equal to either (i) the

Secured Overnight Financing Rate (“SOFR”) plus a spread between 112.5 to 137.5 basis points or (ii) the greatest of

(a) 0%, (b) the Federal Funds Rate in effect on such day plus 50 basis points, (c) the SOFR for a one month tenor in

effect on such day (to the extent ascertainable), plus 100 basis points, and (d) the Prime Rate plus (y) a spread

between 12.5 basis points and 37.5 basis points. In connection with the refinancing, the Company expensed $8

million of previously capitalized debt issuance costs relating to certain lenders under the ABL Facility who exited

the syndicate, and included in loss on debt extinguishment on the consolidated statements of net income.

Additionally, in connection with the refinancing, the Company capitalized $9 million of debt issuance costs.

The ABL Credit Facility contains negative covenants that permit, subject to certain defined conditions, the

Company to, among other things, (i) incur additional indebtedness or engage in certain other types of financing

transactions, (ii) allow certain liens to attach to assets, (iii) repurchase, or pay dividends, or make certain other

restricted payments on, capital stock and certain other securities, subject to applicable caps, (iv) prepay certain

indebtedness and (v) make certain acquisitions and investments. Under the ABL Credit Facility, there is one

financial covenant that will only apply in the future if excess availability under the ABL Credit Facility falls below

the greater of 10 percent of the maximum borrowing amount under the ABL Credit Facility or $175 million. As of

March 31, 2026, availability under the ABL Credit Facility exceeded this threshold and, as a result, the financial

covenant was not applicable.

As of March 31, 2026, the Company had $999 million outstanding under the ABL Credit Facility bearing

interest at the SOFR of 4.80%, included in long-term debt on the condensed consolidated balance sheets.

The ABL Credit Facility provides available “borrowing capacity” (the maximum borrowing permitted,

assuming there is sufficient collateral as identified under the ABL Facility) and “net excess availability” (the amount

of additional debt the Company could borrow based on the existing borrowing base). As of March 31, 2026, the

Company had a borrowing base, as defined in the ABL Credit Facility, of $2,280 million. After outstanding

borrowings and letters of credit, the net excess availability at March 31, 2026, as defined in the ABL Credit Facility,

was $1,276 million, of which the Company could borrow up to $1,048 million without any additional repayment

conditions.

Other

Certain note agreements between the Company and various institutions contain restrictions and financial

covenants, including maintaining an adjusted fixed charge coverage ratio of 1.15 to 1.00 and a net funded debt to

adjusted EBITDA ratio of 6.00 to 1.00. As of March 31, 2026, the Company was in compliance with those

restrictions and financial covenants.

As of March 31, 2026 the Company had $6 million of letters of credit outstanding with financial institutions

secured by line of credit availability. The letters of credit automatically renew annually unless the Company gives

notice to the financial institution to terminate the letter of credit.

EquipmentShare.com Inc 10-Q