12.

Credit Agreements

Short-term borrowings included in the consolidated balance sheets as of December 31, 2025, and December 31, 2024, consisted of borrowings by the Company’s foreign subsidiaries on local lines of credit totaling $50,618 and $55,848, respectively. As of December 31, 2025 and December 31, 2024, the weighted-average interest rates on the short-term borrowings were 5.67% and 5.44%, respectively.

Long-term borrowings are included in the consolidated balance sheets as follows:

	*December 31,*
	*2025*			*2024*
Tranche A Term Loan Facility	$	700,000		$	712,500
Term Loan B Facility		493,750			498,750
Original issue discount and deferred financing costs		(5,673	)		(8,203	)
Revolving Facility		-			-
Finance lease obligation		90,915			66,355
Other		3,456			8,972
Total		1,282,448			1,278,374
Less: current portion of debt		12,729			60,753
Less: current portion of finance lease obligation		9,463			6,845
Total long-term borrowings and finance lease obligations	$	1,260,256		$	1,210,776

As of December 31, 2025, there were $4,987 of unamortized deferred financing costs associated with the New Revolving Facility (as defined below) included in operating lease and other assets in the consolidated balance sheets, and $5,673 of unamortized original issue discount and deferred financing costs linked to the New Tranche A Term Loan Facility and Term Loan B Facility (as defined collectively below) included in long-term borrowings and finance lease obligations in the consolidated balance sheets.

The Company’s credit agreements originally provided for a $1,200,000 Tranche B Term Loan Facility (Original Term Loan B Facility) and included a $300,000 uncommitted incremental term loan on that facility. After several amendments, the Original Term Loan B Facility bore interest at rates based on either a base rate plus an applicable margin of 0.75% or adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, and was scheduled to mature on December 13, 2026.

In July 2024, the Company extinguished the $530,000 balance then outstanding under the Original Term Loan B Facility and replaced it with a new $500,000 Tranche B Term Loan Facility maturing on July 3, 2031 (New Term Loan B Facility and, together with the Original Term Loan B Facility, the Term Loan B Facility). The New Term Loan B Facility continues to include a $300,000 uncommitted incremental term loan that is available on that facility. In accordance with ASC 470-50, the Company capitalized $2,991 of debt issuance costs related to this transaction. Additionally, the Company wrote-off the unamortized deferred financing costs related to the Original Term Loan B facility of $4,236 and expensed $625 of fees paid to creditors as a loss on refinancing of debt. The New Term Loan B Facility bears interest at the SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, resulting in a 5.62% combined rate as of December 31, 2025 .

The New Term Loan B Facility does not require an Excess Cash Flow payment (as defined in the New Term Loan B Facility credit agreement) if the Company's net secured leverage ratio is maintained below 3.75 to 1.00. As of December 31, 2025 , the Company's net secured leverage ratio was 1.32 to 1.00, and the Company was in compliance with all covenants under the facility. There are no financial maintenance covenants on the Term Loan B Facility.

The Company's original Tranche A Term Loan Facility provided an aggregate principal amount of $750,000 (Original Tranche A Term Loan Facility), along with a $1,250,000 revolving facility (Original Revolving Facility) with all LIBOR provisions replaced with SOFR provisions. The Original Tranche A Term Loan Facility and the Original Revolving Facility bore interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company's total leverage ratio and subject to a SOFR floor of 0.0%.

On July 1, 2025, the Company amended the Original Tranche A Term Loan Facility and Original Revolving Facility (Prior Amended Credit Agreement), extending the maturity of both to July 1, 2030, revising the Original Tranche A Term Loan Facility outstanding principal balance to $700,000 (New Tranche A Term Loan Facility), reducing the Original Revolving Facility borrowing capacity to $1,000,000 (New Revolving Facility) (collectively the New Credit Agreements), and redefined the Term Benchmark (as defined in the Prior Amended Credit Agreement) to replace the Adjusted Term SOFR Rate (as defined in the Prior Amended Credit Agreement) with the Term SOFR Rate (as defined in the New Credit Agreement), resulting in an interest rate reduction of 0.10%. Except for redefining the Term Benchmark, interest rates for the New Credit Agreements remain unchanged from the original credit agreements. As of December 31, 2025, the interest rate for the New Tranche A Term Loan Facility and the New Revolving Facility is 5.12% .

In accordance with ASC 470-50, the Company capitalized $5,275 of debt issuance costs related to this credit agreement amendment transaction. Additionally, the Company wrote-off certain unamortized deferred financing costs related to the Original Revolving Facility of $443 and expensed $782 of third-party fees as a loss on refinancing of debt.

Both the New Tranche A Term Loan Facility and the New Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00, as well as an interest coverage ratio above 3.00 to 1.00. As of December 31, 2025 , the Company’s total leverage ratio was 1.39 to 1.00, and the Company's interest coverage ratio was 11.76 to 1.00. The Company was also in compliance with all other covenants of the New Credit Agreements as of December 31, 2025 .

The New Term Loan B Facility, New Tranche A Term Loan Facility and New Revolving Facility are guaranteed by substantially all of the Company’s wholly-owned domestic restricted subsidiaries and are secured by associated collateral agreements which pledge a first priority lien on virtually all of the Company’s assets, including fixed assets and intangibles, cash, trade accounts receivable, inventory, and other current assets and proceeds thereof.

As of December 31, 2025 , there was $0 outstanding under the New Revolving Facility, leaving $999,250 of unused capacity, net of outstanding letters of credit.

The New Tranche A Term Loan Facility and New Revolving Facility mature on July 1, 2030. The New Tranche A Term Loan Facility is repayable in quarterly installments commencing October 1, 2026, with a balloon payment due at maturity. The Term Loan B Facility matures on July 3, 2031, and is repayable in quarterly installments which commenced September 2024, with a balloon payment due at maturity. Maturities of the Company's New Tranche A Term Loan Facility, Term Loan B Facility and New Revolving Facility outstanding on December 31, 2025 , before considering original issue discount and deferred financing costs, were as follows:

	*New Tranche A Term Loan Facility*		*Term Loan B Facility*		*New Revolving Facility*		*Total*
2026	$	4,375	$	5,000	$	-	$	9,375
2027		21,875		5,000		-		26,875
2028		35,000		5,000		-		40,000
2029		43,750		5,000		-		48,750
2030		595,000		5,000		-		600,000
2031		-		468,750		-		468,750
Total	$	700,000	$	493,750	$	-	$	1,193,750

Historical Timeline

Fiscal Year	Filed
2025	Feb 18, 2026	Showing above
2024	Feb 19, 2025

2023	Feb 21, 2024

2022	Feb 22, 2023

2021	Feb 22, 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.

GENERAC HOLDINGS INC. Debt Disclosure

Historical Timeline

About Debt Disclosures

Other Available Disclosures