MAXIMUS, INC.MMS
MAXIMUS, INC. Debt Disclosure
DEBT AND DERIVATIVES
Our principal debt agreement is with J.P. Morgan Chase Bank, N.A. (the Credit Agreement). It is available for general corporate purposes, including the funding of working capital, capital expenditures and business acquisitions. The Credit Agreement has three components.
•A Term Loan A facility (the TLA), which matures on May 30, 2029. Interest rates on this facility are variable, based upon a combination of a Secured Overnight Financing Rate (SOFR) and a margin based on our leverage, varying between 1.0% and 2.0%.
•A Term Loan B facility (the TLB), which matures on May 30, 2031. The interest rates are based upon SOFR, subject to a floor of 0.5%, plus a fixed 2.0% margin.
•A revolving credit facility (the Revolver), which enables us to borrow or utilize up to $750.0 million. The interest on this facility is generally based upon the same rates as those used for the TLA. In addition, we are charged a commitment fee between 0.125% and 0.30% on unused funds, which is based upon our leverage. Commitment fees are recorded as interest expense on the consolidated statements of operations.
In addition to the Credit Agreement, we hold revolving credit facilities in Canada and the United Kingdom. These facilities are intended to allow our businesses to meet any short-term working capital needs.
| Table 6.1: Details of Debt | |||||||||||
| As of September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Term Loan A (TLA) | $ | 853,125 | $ | 641,875 | |||||||
| Term Loan B (TLB) | 493,750 | 498,750 | |||||||||
| Subsidiary loan agreements | — | 5,194 | |||||||||
| Total debt principal | 1,346,875 | 1,145,819 | |||||||||
| Less: Unamortized debt-issuance costs and discounts | (12,602) | (13,726) | |||||||||
| Total debt | 1,334,273 | 1,132,093 | |||||||||
| Less: Current portion of long-term debt | (52,680) | (40,139) | |||||||||
| Long-term debt | $ | 1,281,593 | $ | 1,091,954 | |||||||
As a result of the divestiture of the our Australian operations in fiscal year 2025, the subsidiary loan agreement totaling $5.2 million as of September 30, 2024 was extinguished, and we are no longer subject to the associated borrowing agreements or covenants.
In addition to the borrowings above, our Credit Agreement has issued letters of credit totalling $3.0 million as of both September 30, 2025 and 2024.
Our credit agreements require us to comply with a number of covenants, including leverage and interest coverage ratios. At September 30, 2025, we were in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends.
The Credit Agreement is, subject to customary exceptions, secured by substantially all of our assets and all of the assets of our wholly owned material domestic subsidiaries, and guaranteed by each of our wholly owned material domestic subsidiaries.
Costs incurred in establishing the Credit Agreement were recorded as a reduction to the gross debt balance and will be amortized over the respective lives of the arrangements. Costs incurred in amending the Credit Agreement were deferred or expensed depending upon the nature of the costs. All costs deferred as of the date of an amendment are amortized prospectively over the new lives of the amended arrangements.
| Table 6.2: Details of Future Minimum Principal Payments Due | |||||
| Amount Due | |||||
| (in thousands) | |||||
| Year ended September 30, 2026 | $ | 55,625 | |||
| Year ended September 30, 2027 | 72,500 | ||||
| Year ended September 30, 2028 | 78,125 | ||||
| Year ended September 30, 2029 | 666,875 | ||||
| Year ended September 30, 2030 | 5,000 | ||||
| Thereafter | 468,750 | ||||
| Total Payments | $ | 1,346,875 | |||
Interest Rate Derivative Instruments
We utilize interest rate swaps that are designed to reduce our risk from changes in interest rates, which we have designated as cash flow hedges. The following table presents our interest rate swaps:
| Table 6.3: Interest Rate Derivative Instruments | ||||||||||||||||||||||||||
| As of September 30, 2025 | ||||||||||||||||||||||||||
| Debt Principal Hedged | Notional Amount | Fixed Interest Rate | Effective | Expiry | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Term Loan A | $ | 500,000 | 2.31 | % | Present | May 2026 | ||||||||||||||||||||
| Term Loan B | $ | 75,000 | 3.72 | % | Present | September 2026 | ||||||||||||||||||||
| Term Loan B | $ | 75,000 | 3.62 | % | Present | September 2027 | ||||||||||||||||||||
| Term Loan A | $ | 150,000 | 3.14 | % | June 2026 | September 2027 | ||||||||||||||||||||
| Term Loan A | $ | 150,000 | 3.28 | % | June 2026 | September 2028 | ||||||||||||||||||||
In addition to the arrangements above, we had an arrangement for a notional amount of $150 million, which hedged a SOFR component of our TLA to a fixed amount of 4.38%. This arrangement expired in September 2024. We also had an arrangement for a notional amount of $75 million, which hedged a SOFR component of our TLB to a fixed amount of 4.09%. This arrangement expired in September 2025.
Our effective interest rate as of September 30, 2025 was 5.37%.
At September 30, 2025 and September 30, 2024, we had assets of $5.5 million and $12.6 million, respectively, related to these interest rate swaps. At September 30, 2025 and September 30, 2024, we had liabilities of $1.7 million and $3.4 million, respectively, related to these interest rate swaps. These instruments were recorded as "other assets" and "other liabilities" within our consolidated balance sheets. As these instruments are considered effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive income (AOCI)" within our consolidated financial statements.
| Table 6.4: Gains/(Losses) on Derivatives | |||||||||||||||||
| For the Year Ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Gain/(loss) recognized in AOCI on derivatives, net of tax | $ | 4,561 | $ | (3,681) | $ | 8,558 | |||||||||||
| Amounts reclassified to earnings from accumulated other comprehensive income | (8,487) | (12,423) | (8,837) | ||||||||||||||
| Net current period other comprehensive loss | $ | (3,926) | $ | (16,104) | $ | (279) | |||||||||||
Counterparty Risk
We are exposed to credit losses in the event of nonperformance by the counterparty to our derivative instrument. Our counterparty has investment-grade credit ratings; accordingly, we anticipate that the counterparty will be able to fully satisfy its obligations under the contracts. Our agreements outline the conditions upon which we or the counterparty are required to post collateral. As of September 30, 2025 and 2024, there was no collateral posted with our counterparty related to the derivatives.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2024 | Nov 21, 2024 | |
| 2023 | Nov 16, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 18, 2021 | |
| 2020 | Nov 19, 2020 | |
| 2019 | Nov 26, 2019 | |
| 2018 | Nov 20, 2018 | |
| 2017 | Nov 20, 2017 | |
| 2016 | Nov 21, 2016 | |
| 2015 | Nov 16, 2015 | |
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.