ABM INDUSTRIES INC /DE/ABM
ABM INDUSTRIES INC /DE/ Debt Disclosure
CREDIT FACILITY
| As of October 31, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
Current portion of long-term debt(1)(2) | |||||||||||
| Gross term loan | $ | 30.0 | $ | 32.5 | |||||||
| Unamortized deferred financing costs | (0.6) | (0.9) | |||||||||
| Current portion of term loan | $ | 29.4 | $ | 31.6 | |||||||
Long-term debt(1)(2) | |||||||||||
| Gross term loan | $ | 555.0 | $ | 503.8 | |||||||
| Unamortized deferred financing costs | (1.9) | (0.6) | |||||||||
| Total noncurrent portion of term loan | 553.1 | 503.2 | |||||||||
Revolving line of credit(3) | 984.0 | 799.0 | |||||||||
| Long-term debt | $ | 1,537.1 | $ | 1,302.2 | |||||||
(1) At October 31, 2025, and October 31, 2024, the weighted average interest rate on our outstanding borrowings, not including letters of credit and swaps, was 5.84% and 6.68%, respectively.
(2) At October 31, 2025, we had borrowing capacity of up to $577.5 million
(3) At October 31, 2025, standby letters of credit amounted to $23.5 million
On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility, consisting of a $900.0 million revolving line of credit and an $800.0 million amortizing term loan, both of which were scheduled to mature on September 1, 2022. In accordance with the terms of the Credit Facility, the revolving line of credit was reduced to $800.0 million on September 1, 2018. The Credit Facility was amended on June 28, 2021, to increase the capacity of the Revolver and term loan to $1.3 billion and $650 million, respectively, and to extend the maturity to June 28, 2026. It was further amended on November 1, 2022, to transition the benchmark interest rate from London Interbank Offered Rate (“LIBOR”) to SOFR.
On February 26, 2025, we amended and restated the Credit Facility (the “Amended Credit Facility”), extending the maturity date to February 26, 2030, and increasing the capacity of the revolving credit facility from $1.3 billion to $1.6 billion and the then-remaining term loan outstanding from $528.1 million to $600.0 million. The Amended Credit Facility provides for the issuance of up to $250.0 million for standby letters of credit and the issuance of up to $100.0 million in swingline advances. The obligations under the Amended Credit Facility are guaranteed by the material, domestic wholly owned subsidiaries of ABM and are secured by a pledge of substantially all of the existing and future property and assets of ABM and the guarantors, including a pledge of the capital stock of the wholly owned domestic subsidiaries held by ABM and the guarantors and 65% of the capital stock of the first-tier foreign subsidiaries held by ABM and the guarantors, in each case subject to exceptions. Additionally, we may repay amounts borrowed under the Amended Credit Facility at any time without penalty.
The Amended Credit Facility contains certain covenants, including a maximum total net leverage ratio of 5.00 to 1.00, a maximum secured net leverage ratio of 4.00 to 1.00, and a minimum interest coverage ratio of 1.50 to 1.00, as well as other financial and non-financial covenants. In the event of a material acquisition, as defined in the Amended Credit Facility, we may elect to increase the maximum total net leverage ratio to 5.50 to 1.00 for a total of four fiscal quarters and increase the maximum secured net leverage ratio to 4.50 to 1.00 for a total of four fiscal quarters. Our borrowing capacity is subject to, and limited by, compliance with the covenants described above. At October 31, 2025, we were in compliance with these covenants.
The Amended Credit Facility also includes customary events of default, including: failure to pay principal, interest, or fees when due; failure to comply with covenants; the occurrence of certain material judgments; and a change in control of the Company. If certain events of default occur, including certain cross-defaults, insolvency, change in control, or violation of specific covenants, then the lenders can terminate or suspend our access to the
Amended Credit Facility, declare all amounts outstanding (including all accrued interest and unpaid fees) to be immediately due and payable, and require that we cash collateralize the outstanding standby letters of credit.
We incurred deferred financing costs of $8.0 million in conjunction with the execution of the Amended Credit Facility and carried over $2.9 million of unamortized deferred financing from initial execution and previous amendments of the Credit Facility. Total deferred financing costs of $10.9 million, consisting of $3.0 million related to the term loan and $7.9 million related to the Revolver, are being amortized to interest expense over the term of the Amended Credit Facility.
Long-Term Loan Maturities
During 2025, we made principal payments under the term loan of $23.1 million. As of October 31, 2025, the following principal payments are required under the Amended Credit Facility:
| (in millions) | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||||
| Debt maturities | $ | 30.0 | $ | 30.0 | $ | 30.0 | $ | 30.0 | $ | 1,449.0 | ||||||||||||||||||||||
Interest Rate Swaps
We enter into interest rate swaps to manage the interest rate risk associated with our floating-rate, SOFR-based borrowings. Under these arrangements, we typically pay a fixed interest rate in exchange for SOFR-based variable interest throughout the life of the agreement. We initially report the mark-to-market gain or loss on a derivative as a component of AOCL and subsequently reclassify the gain or loss into earnings when the hedged transactions occur and affect earnings. Interest payables and receivables under the swap agreements are accrued and recorded as adjustments to interest expense. All of our interest rate swaps have been designated and accounted for as cash flow hedges from inception. See Note 8, “Fair Value of Financial Instruments,” regarding the valuation of our interest rate swaps.
| Notional Amount | Fixed Interest Rate | Effective Date | Maturity Date | |||||||||||||||||
| $ 100.0 million | 1.72% | February 9, 2022 | June 28, 2026 | |||||||||||||||||
| $ 150.0 million | 1.85% | February 25, 2022 | June 28, 2026 | |||||||||||||||||
| $ 100.0 million | 2.88% | May 4, 2022 | June 28, 2026 | |||||||||||||||||
$86.9 million | 2.83% | July 7, 2022 | June 28, 2026 | |||||||||||||||||
$13.1 million | 2.79% | July 18, 2022 | June 28, 2026 | |||||||||||||||||
| $ 170.0 million | 3.81% | November 1, 2022 | June 28, 2026 | |||||||||||||||||
At October 31, 2025 and 2024, amounts recorded in AOCL for interest rate swaps were a gain of $2.4 million, net of taxes of $1.9 million, and a gain of $9.2 million, net of taxes of $4.3 million, respectively. At October 31, 2025, the total amount expected to be reclassified from AOCL to earnings during the next 12 months is a gain of $3.1 million, net of taxes of $1.1 million.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 19, 2025 | Showing above |
| 2023 | Dec 18, 2023 | |
| 2022 | Dec 21, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.