BRIGHT HORIZONS FAMILY SOLUTIONS INC.BFAM
BRIGHT HORIZONS FAMILY SOLUTIONS INC. Debt Disclosure
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS
Senior Secured Credit Facilities
The Company’s senior secured credit facilities consist of a term loan B facility (“term loan B”) and a $900 million multi-currency revolving credit facility (“revolving credit facility”). Prior to April 17, 2025, the Company’s senior secured credit facilities included a term loan A facility (“term loan A”).
Long-term debt obligations were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Term loan B | $ | 450,000 | $ | 583,500 | |||||||
| Term loan A | — | 367,500 | |||||||||
| Revolving credit facility | 499,552 | — | |||||||||
| Deferred financing costs and original issue discount | (2,386) | (4,051) | |||||||||
| Total debt | 947,166 | 946,949 | |||||||||
| Less current portion of term loans | — | (28,500) | |||||||||
| Less current portion of revolving credit facility | (199,552) | — | |||||||||
| Long-term debt | $ | 747,614 | $ | 918,449 | |||||||
On August 21, 2025, the Company amended its existing senior secured credit facilities to, among other changes, refinance the existing term loan B and to extend the maturity date. On the closing date, the Company used its revolving credit facility to prepay $50 million of the outstanding principal amount of the existing term loan B. In conjunction with the amendment, the Company recorded expense of $1.9 million and capitalized $0.2 million in fees to new lenders that have been recorded as deferred financing costs in long-term debt and will be amortized over the term of the credit facility.
On April 17, 2025, the Company amended its existing senior secured credit facilities to, among other changes, increase the borrowing capacity of its revolving credit facility from $400 million to $900 million and extend the maturity date. On the closing date, the Company used $362.5 million from its revolving credit facility to repay the outstanding balances under the term loan A. In conjunction with the amendment, the Company recorded expense of $0.6 million and capitalized $2.9 million in fees that have been recorded in other assets and will be amortized over the term of the revolving credit facility.
On December 11, 2024, the Company amended its existing senior secured credit facilities to, among other changes, reduce the applicable interest rates of the term loan B by 25 basis points. In connection with the terms of this amendment, the applicable interest rate spread for the term loan B was further reduced by 25 basis points in January 2025, when the Company received a credit rating upgrade.
All borrowings under the credit facilities are subject to variable interest. The effective interest rate for the term loans was 5.47% and 6.21% at December 31, 2025 and 2024, respectively, and the weighted average interest rate was 5.99%, 7.25%, and 7.19% for the years ended December 31, 2025, 2024, and 2023, respectively, prior to the effects of any interest rate hedge arrangements. The effective interest rate for the revolving credit facility was 4.96% as of December 31, 2025 and the weighted average interest rate for the revolving credit facility was 5.70%, 7.81%, and 7.73% for the years ended December 31, 2025, 2024, and 2023, respectively, prior to the effects of any interest rate hedge arrangements. The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected interest period as terms may vary between under-30 day and over-30 day borrowings.
Term Loan B
As noted above, the terms of the term loan B were amended on August 21, 2025.
The term loan B matures on August 21, 2032. Borrowings under the amended term loan B bear interest at a rate per annum equal to the base rate plus a margin of 0.75% or the Secured Overnight Financing Rate ("SOFR") plus a margin of 1.75%. The term SOFR option is one, three or six month SOFR, as selected by the Company, or, with the approval of the applicable lenders, twelve months or less than one month term SOFR, subject to an interest rate floor of 0.50%. The base rate is the highest of (x) the prime rate quoted by The Wall Street Journal, (y) the greater of the federal funds rate and the overnight bank funding rate, in either case, plus 0.50%, and (z) one-month term SOFR plus 1.00%, subject to an interest rate floor of 1.50%.
Prior to the August 2025 amendment, the term loan B required quarterly principal payments equal to 1% per annum of the aggregate principal amount of the term loan B outstanding as of December 11, 2024, the date the Company amended its senior secured credit facility, with the remaining principal balance due at maturity. Effective as of December 11, 2024, borrowings under the term loan B bore interest at a rate per annum of 1.00% over the base rate, or 2.00% over the selected term SOFR rate. Effective as of January 2025, borrowings under the term loan B bore interest at a rate per annum of 0.75% over the base rate, or 1.75% over the selected term SOFR rate. The base rate was subject to an interest rate floor of 1.50% and the selected term SOFR rate was subject to an interest rate floor of 0.50%.
Prior to the December 2024 amendment, borrowings under the term loan B bore interest at a rate per annum of 1.25% over the base rate, or 2.25% over the adjusted term SOFR rate.
In February 2025, the Company voluntarily prepaid $44.5 million of the outstanding principal balance on its term loan B, which satisfied the remaining annual principal payments due until maturity. In May 2025 and August 2025, the Company utilized its revolving credit facility to prepay $39.0 million and $50.0 million, respectively, of the outstanding principal balance on its term loan B to lower borrowing costs.
Term Loan A
As noted above, balances outstanding under the term loan A were repaid on April 17, 2025 using availability under the revolving credit facility.
Prior to the April 2025 debt amendment, the term loan A was scheduled to mature on November 23, 2026 and required quarterly principal payments equal to 2.5% per annum of the original aggregate principal amount of the term loan A in each of the first three years, 5.0% in the fourth year, and 7.5% in the fifth year. The remaining principal balance was due at maturity. Borrowings under the term loan A bore interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate. The base rate was subject to an interest rate floor of 1.00% and the adjusted term SOFR rate was subject to an interest rate floor of 0.00%.
Revolving Credit Facility
As noted above, the terms of the revolving credit facility were amended on April 17, 2025.
The $900 million revolving credit facility matures on April 17, 2030. However, if there is any additional material indebtedness maturing on or before April 17, 2030, the maturity date will be 91 days prior to the maturity of that material indebtedness, unless the Company satisfies a minimum liquidity threshold test as of that date. As of December 31, 2025, the Company does not hold any material indebtedness maturing on or before April 17, 2030.
As of December 31, 2025, borrowings outstanding on the revolving credit facility were $496.5 million (composed of $370.0 million, €71.8 million and £31.4 million) and letters of credit outstanding were $20.2 million, with $383.7 million available for borrowing. Since the revolving credit facility has a contractual maturity in excess of 12 months from the balance sheet date and the Company has the ability and intends to renew borrowings of at least $300 million through December 31, 2026, such balance has been presented as long-term on the condensed consolidated balance sheet at December 31, 2025. As of December 31, 2024, there were no borrowings outstanding on the revolving credit facility, and letters of credit outstanding were $15.2 million, with $384.8 million available for borrowing.
Borrowings held in USD under the revolving credit facility bear interest at a rate per annum ranging from 0.25% to 0.75% over the base rate (as defined in the credit agreement), or 1.25% to 1.75% over the term SOFR rate. The base rate is subject to an interest rate floor of 1.00% and the term SOFR rate is subject to an interest rate floor of 0.00%. Prior to the April 17, 2025 amendment, borrowings under the revolving credit facility bore interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate.
Borrowings held in Euros under the revolving credit facility bear interest at a rate per annum equal to the Euro Interbank Offered Rate “Euribor” subject to an interest rate floor of 0.00% plus applicable margin between 1.25% and 1.75%. Borrowings held in British pounds under the revolving credit facility bear daily interest at a rate per annum equal to the Sterling Overnight Index Average rate “SONIA” subject to an interest rate floor of 0.00% plus a 0.0326% spread adjustment in addition to an applicable margin between 1.25% and 1.75%.
In 2024, the Company entered into a AU$5 million (US$3.3 million) uncommitted working capital credit facility in Australia for short-term borrowing purposes. As of December 31, 2025 and December 31, 2024, there were AU$4.5 million (US$3.0 million) and no borrowings outstanding under this facility, respectively. The effective interest rate as of December 31, 2025 was 5.59% and the weighted average interest rate for the year ended December 31, 2025 was 5.55% for this working capital credit facility.
Debt Covenants
All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material United States subsidiaries. The senior secured credit facilities contain a number of covenants that, among other things and subject to certain exceptions, may restrict the ability of Bright Horizons Family Solutions LLC (the Borrower), the Company’s wholly-owned subsidiary, and its restricted subsidiaries, to: incur liens; make investments, loans, advances and acquisitions; incur additional indebtedness or guarantees; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; engage in transactions with affiliates; sell assets, including capital stock of the Company’s subsidiaries; alter the business conducted; enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and consolidate or merge.
In addition, the credit agreement governing the senior secured credit facilities requires Bright Horizons Capital Corp. (the Guarantor), the Company's direct subsidiary, to be a passive holding company, subject to certain exceptions. The Company is the ultimate parent of the Guarantor and the Borrower and the Company’s material assets are held, and operations are conducted, by the Borrower and its subsidiaries. The revolving credit facility requires Bright Horizons Family Solutions LLC as the Borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00. A breach of the applicable covenant is subject to certain equity cure rights.
Derivative Financial Instruments
The Company is subject to interest rate risk as all borrowings under the senior secured credit facilities are subject to variable interest rates. The Company's risk management policy permits using derivative instruments to manage interest rates and other risks. The Company uses interest rate cap agreements to manage a portion of the risk related to changes in cash flows from interest rate movements.
In June 2020, the Company entered into interest rate cap agreements with a total notional value of $800 million, designated and accounted for as cash flow hedges from inception, to provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 0.9%. Interest rate cap agreements for $300 million notional value had an effective date of June 30, 2020 and expired on October 31, 2023, while interest rate cap agreements for another $500 million notional amount had an effective date of October 29, 2021 and expired on October 31, 2023.
In December 2021, the Company entered into additional interest rate cap agreements with a total notional value of $900 million designated and accounted for as cash flow hedges from inception. Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expired on October 31, 2025, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 2.4%. Interest rate cap agreements for $300 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 2.9%.
In March and July 2025, the Company entered into additional interest rate cap agreements with a total notional value of $150 million and $100 million, respectively, designated and accounted for as cash flow hedges from inception. The March and July 2025 interest rate cap agreements, both of which had forward starting effective dates of October 31, 2025, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 3.5% and 3.0%, respectively, and expire on October 31, 2027 and October 31, 2026, respectively.
The interest rate caps are recorded on the Company’s consolidated balance sheet at fair value and are classified based on the instruments’ maturity dates. The Company records gains and losses resulting from changes in the fair value of the interest rate caps to accumulated other comprehensive income or loss, inclusive of the related income tax effects. These gains and losses are subsequently reclassified into earnings and recognized to interest expense in the Company’s consolidated statement of income in the period that the hedged interest expense on the term loan facilities is recognized. The premium paid for each interest rate cap agreement was recorded as an asset and will be allocated to each of the individual hedged interest payments on the basis of their relative fair values. The change in each respective allocated fair value amount will be reclassified out of accumulated other comprehensive income when each of the hedged forecasted transactions impacts earnings and recognized to interest expense in the Company’s consolidated statement of income.
The fair value of the derivative financial instruments was as follows:
| December 31, | ||||||||||||||||||||
| Derivative financial instruments | Consolidated balance sheet classification | 2025 | 2024 | |||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Interest rate caps - asset | Prepaid and other current assets | $ | 1,763 | $ | 8,407 | |||||||||||||||
| Interest rate caps - asset | Other assets | $ | 423 | $ | 6,311 | |||||||||||||||
The effect of the derivative financial instruments on other comprehensive income (loss) was as follows:
| Derivatives designated as cash flow hedging instruments | Amount of gain (loss) recognized in other comprehensive income (loss) | Consolidated statement of income classification | Amount of net gain (loss) reclassified into earnings | Total effect on other comprehensive income (loss) | ||||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||
| Year ended December 31, 2025 | ||||||||||||||||||||||||||
| Cash flow hedges | $ | (1,212) | Interest expense — net | $ | 10,920 | $ | (12,132) | |||||||||||||||||||
| Income tax effect | 323 | Income tax benefit (expense) | (2,912) | 3,235 | ||||||||||||||||||||||
| Net of income taxes | $ | (889) | $ | 8,008 | $ | (8,897) | ||||||||||||||||||||
| Year ended December 31, 2024 | ||||||||||||||||||||||||||
| Cash flow hedges | $ | 9,176 | Interest expense — net | $ | 21,120 | $ | (11,944) | |||||||||||||||||||
| Income tax effect | (2,450) | Income tax benefit (expense) | (5,639) | 3,189 | ||||||||||||||||||||||
| Net of income taxes | $ | 6,726 | $ | 15,481 | $ | (8,755) | ||||||||||||||||||||
| Year ended December 31, 2023 | ||||||||||||||||||||||||||
| Cash flow hedges | $ | 6,320 | Interest expense — net | $ | 30,383 | $ | (24,063) | |||||||||||||||||||
| Income tax effect | (1,687) | Income tax benefit (expense) | (8,112) | 6,425 | ||||||||||||||||||||||
| Net of income taxes | $ | 4,633 | $ | 22,271 | $ | (17,638) | ||||||||||||||||||||
During the next 12 months, the Company estimates that a net loss of $0.5 million, pre-tax, will be reclassified from accumulated other comprehensive income and recorded to interest expense related to these derivative financial instruments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
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.