Hub Group, Inc. Debt Disclosure
NOTE 10. Long-Term Debt and Financing Arrangements
In February 2022, we entered into a five-year, $350 million unsecured credit agreement (the "Credit Agreement"). Borrowings under the Credit Agreement generally bear interest at a variable rate equal to (i) the secured overnight financing rate (published by the Federal Reserve Bank of New York, “SOFR”), plus a specified margin based on the term of such borrowing, plus a specified margin based upon Hub’s total net leverage ratio (as defined in the Credit Agreement) (the "Total Net Leverage Ratio"), or (ii) the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% and one-month SOFR) plus a specified margin based upon the Total Net Leverage Ratio. The specified margin for SOFR loans varies from 100.0 to 175.0 basis points per annum. The specified margin for base rate loans varies from 0.0 to 75.0 basis points per annum. Hub must also pay (1) a commitment fee ranging from 10.0 to 25.0 basis points per annum (based upon the Total Net Leverage Ratio) on the aggregate unused commitments and (2) a letter of credit fee ranging from 100.0 to 175.0 basis points per annum (based upon the Total Net Leverage Ratio) on the undrawn amount of letters of credit.
We have standby letters of credit that expire in 2025. Our letters of credit were $1 million as of both December 31, 2024 and December 31, 2023, respectively.
As of December 31, 2024 and December 31, 2023, we had no borrowings under our respective credit agreements. Our unused and available borrowings were $349 million as of both December 31, 2024 and December 31, 2023, respectively. We were in compliance with the financial covenants in our credit agreements as of December 31, 2024 and December 31, 2023.
We have entered into various Equipment Notes (“Notes”) for the purchase of tractors, trailers, containers and refrigeration units. The Notes are secured by the underlying equipment financed in the agreements.
Our outstanding Notes are as follows (in thousands):
|
December 31, |
|
|
December 31, |
|
||
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
||
Interim funding for equipment received and expected to be converted to an equipment note in subsequent year; interest paid at a variable rate |
$ |
- |
|
|
$ |
3,265 |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2029 commencing on various dates in 2024; interest is paid monthly at a fixed annual rate between 5.11% and 6.24% (1) |
|
21,400 |
|
|
|
- |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2028 commencing on various dates in 2023; interest is paid monthly at a fixed annual rate between 5.21% and 6.32% |
|
85,050 |
|
|
|
105,744 |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2027 commencing on various dates in 2022 and 2023; interest is paid monthly at a fixed annual rate between 2.07% and 6.45% |
|
108,411 |
|
|
|
147,192 |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2026 commencing on various dates in 2021; interest is paid monthly at a fixed annual rate between 1.48% and 2.41% |
|
36,942 |
|
|
|
55,797 |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2025 commencing on various dates in 2020; interest is paid monthly at a fixed annual rate between 1.51% and 1.80% |
|
12,559 |
|
|
|
30,930 |
|
|
|
|
|
|
|
||
Secured Equipment Notes due on various dates in 2024 commencing on various dates in 2017, 2019 and 2020; interest is paid monthly at a fixed annual rate between 2.50% and 3.59% |
|
- |
|
|
|
7,754 |
|
|
|
|
|
|
|
||
Total debt |
|
264,362 |
|
|
|
350,682 |
|
|
|
|
|
|
|
||
Less current portion of long-term debt |
|
(100,001 |
) |
|
|
(105,108 |
) |
|
|
|
|
|
|
||
Total long-term debt |
$ |
164,361 |
|
|
$ |
245,574 |
|
(1) Includes an immaterial amount of notes held at EASO with interest rates up to 13.95%.
Aggregate principal payments, in thousands, due subsequent to December 31, 2024, are as follows:
Year 1 |
$ |
100,001 |
|
Year 2 |
|
84,812 |
|
Year 3 |
|
55,612 |
|
Year 4 |
|
22,453 |
|
Year 5 |
|
1,484 |
|
|
$ |
264,362 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 25, 2025 | Showing above |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 24, 2017 | |
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.