Bowhead Specialty Holdings Inc.BOW
Bowhead Specialty Holdings Inc. Debt Disclosure
Debt and Financing Arrangements
a) Debt
On November 25, 2025, BSHI issued $150 million aggregate principal amount of 7.75% senior unsecured debt (“Senior Notes”), generating net proceeds of $146.4 million. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and December 1 each year, beginning on June 1, 2026. The Senior Notes are scheduled to mature on December 1, 2030, unless redeemed earlier.
The Company has the option to redeem the Senior Notes in whole at any time, or in part from time to time, at a redemption price equal to the following:
•Prior to December 1, 2028: the greater of (i) 100% of the principal amount of the Senior Notes to be redeemed, or (ii) the present value of the remaining scheduled payments of principal and interest on the Senior Notes, discounted at a Treasury rate plus 50 basis points, in each case plus accrued and unpaid interest to, but excluding, the redemption date;
•On or after December 1, 2028 but before December 1, 2029: 102% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date; and
•On or after December 1, 2029: 100% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.
The related indentures governing the Senior Notes contain various covenants, including restrictions on the issuance or disposition of stock of restricted subsidiaries, restrictions on indebtedness, and restrictions on secured indebtedness. As of December 31, 2025, the Company was in compliance with all covenants contained in the indenture.
Interest expense related to the Senior Notes includes accrued interest and the amortization of debt issuance costs. Debt issuance costs are amortized over the period during which the Senior Notes are outstanding. For the year ended December 31, 2025, the Company recognized $1.0 million of interest expense related to the Senior Notes.
b) Revolving Credit Facilities
On April 22, 2024, the Company entered into a Credit Agreement (the “2024 Credit Agreement”) with certain lenders and JPMorgan Chase Bank, N.A., as administrative agent, swingline lender and issuing bank. The 2024 Credit Agreement provided for a senior secured revolving credit facility (the “2024 Facility”) in the aggregate principal amount of $75 million, which included a $5 million sub-facility for letters of credit. All obligations under the Facility and obligations in respect of certain cash management services and swap agreements with the lenders and their affiliates were (i) unconditionally guaranteed by certain of the Company’s subsidiaries and (ii) secured by a first-priority perfected lien in substantially all of the Company’s and the subsidiary guarantors’ assets. The 2024 Credit Agreement contained certain customary covenants, including financial maintenance covenants.
On November 25, 2025, the Company terminated the 2024 Credit Agreement and as a result of the termination, the Company fully expensed previously unamortized deferred financing fees associated with the 2024 Facility and recognized a loss on extinguishment of debt of $0.9 million during the year ended December 31, 2025. The Company did not have any borrowings under the 2024 Facility prior to its termination.
On November 26, 2025, the Company entered into a new Credit Agreement (the “2025 Credit Agreement”) with PNC Bank, N.A., as administrative agent, swingline lender and issuing bank. The 2025 Credit Agreement provides for a senior secured revolving credit facility (the “2025 Facility”) in the aggregate principal amount of $35 million, which includes a $5 million sub-facility for letters of credit, and an accordion feature permitting the Company to request a one-time increase in total commitments of up to $15 million, subject to lender participation. All obligations under the 2025 Facility and obligations in respect of certain cash management services and swap agreements with the lenders and their affiliates were (i) unconditionally guaranteed by certain of the Company’s subsidiaries and (ii) secured by a first-priority perfected lien in substantially all of the Company’s and the subsidiaries guarantors’ assets. The 2025 Credit Agreement contains certain customary covenants, including financial maintenance covenants. As of December 31, 2025, the Company was in compliance with all of the 2025 Facility’s covenants. The 2025 Facility matures on the earlier of November 26, 2027, or 91 days prior to the earliest date any MGA Agreement will terminate where no MGA Agreement replacement is found.
Interest on the 2025 Facility is based on a floating rate indexed to either (i) adjusted term Secured Overnight Financing Rate (“SOFR”) plus an applicable rate, (ii) the greater of (a) the prime rate, (b) the Federal Reserve Bank of New York rate plus 0.5% per annum and (c) the adjusted term SOFR rate for a one-month interest period plus 1% per annum, plus an applicable rate, or (iii) the adjusted daily simple SOFR plus an applicable rate. As of December 31, 2025, the Company did not have any borrowings outstanding under the 2025 Facility.
The Company had unamortized deferred financing fees related to the 2025 Facility of $0.5 million as of December 31, 2025, and recognized amortization expenses for deferred financing fees of $0.7 million for the year ended December 31, 2025.
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.