Construction Partners, Inc.ROAD
Construction Partners, Inc. Debt Disclosure
Debt
The Company maintains credit facilities to finance acquisitions, to fund the purchase of real estate, construction equipment, plants and other assets, and for general working capital purposes. Debt at September 30, 2025 and 2024 consisted of the following (in thousands):
| September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Long-term debt: | |||||||||||
| Term Loan A | $ | 592,500 | $ | 392,188 | |||||||
| Term Loan B | 843,625 | — | |||||||||
| Revolving Credit Facility | 190,000 | 122,850 | |||||||||
| Total long-term debt | 1,626,125 | 515,038 | |||||||||
| Deferred debt issuance costs, net | (14,011) | (1,514) | |||||||||
| Current maturities of long-term debt | (38,500) | (26,563) | |||||||||
| Long-term debt, net of current maturities and debt issuance costs | $ | 1,573,614 | $ | 486,961 | |||||||
The Company and each of its subsidiaries are parties to a Third Amended and Restated Credit Agreement, dated June 30, 2022, with PNC Bank, National Association, as administrative agent and lender, PNC Capital Markets LLC, as joint lead arranger and sole bookrunner, Regions Bank and BofA Securities, Inc., each as a joint arranger, and certain other lenders (as amended, restated, supplemented or otherwise modified, the “Term Loan A / Revolver Credit Agreement”). The Term Loan A / Revolver Credit Agreement provides for a term loan in the principal amount of $600.0 million (the “Term Loan A”) and a revolving credit facility in an aggregate principal amount of $500.0 million (the “Revolving Credit Facility”).
All outstanding advances under the Term Loan A and Revolving Credit Facility are due and payable in full on June 28, 2030 (the “Term Loan A Maturity Date”). The Term Loan A amortizes in quarterly installments in an amount (subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal) equal to: (a) 1.25% of the original principal amount on each of the quarter-end payment dates; and (b) all remaining principal on the Term Loan A Maturity Date. The annual interest rates applicable to advances are calculated, at the Company’s option, by using either a base rate, Term SOFR, or (solely with respect to the Revolving Credit Facility) Daily Simple SOFR, in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio. Subject to various requirements, the Company generally may (and, under certain circumstances, must), prepay all or a portion of the outstanding balance of the advances, together with accrued interest thereon, prior to their contractual maturity. The obligations of the Company and its subsidiaries under the Term Loan A / Revolver Credit Agreement are secured by a security interest in substantially all of the assets of the Company and each of its subsidiaries that ranks in pari passu with the security interest of the lenders under the Term Loan B (defined below).
At September 30, 2025 and 2024 , there was $592.5 million and $392.2 million, respectively, of principal outstanding under the Term Loan A, $190.0 million and $122.9 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $303.5 million and $268.8 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit.
The Term Loan A / Revolver Credit Agreement contains customary negative covenants for agreements of this type, including, but not limited to, restrictions on the Company’s ability to make acquisitions, make loans or advances, make capital expenditures and investments, pay dividends, create or incur indebtedness, create liens, wind up or dissolve, consolidate, merge or liquidate, or sell, transfer or dispose of assets. The Term Loan A / Revolver Credit Agreement also requires the Company to satisfy certain financial covenants, including a minimum consolidated interest coverage ratio of 3.00-to-1.00 and a maximum consolidated net leverage ratio determined as follows: (i) for each fiscal quarter ending on or prior to December 31, 2025, 4.50-to-1.00; (ii) for each fiscal quarter ending March 31, 2026 through and including September 30, 2026, 4.25-to-1.00; (iii) for each fiscal quarter ending December 31, 2026 through and including June 30, 2027, 4.00-to-1.00; and (iv) for each fiscal quarter ending September 30, 2027 and thereafter, 3.75-to-1.00, subject to certain adjustments. At September 30, 2025 and 2024, the Company’s consolidated interest coverage ratio was 5.76-to-1.00 and 11.32-to-1.00, respectively, and the Company’s consolidated net leverage ratio was 3.10-to-1.00 and 1.81-to-1.00, respectively. At both September 30, 2025 and September 30, 2024, the Company was in compliance with all covenants under the Term Loan A / Revolver Credit Agreement.
From time to time, the Company has entered into interest rate swap agreements to hedge against the risk of changes in interest rates. At September 30, 2025 and 2024, the aggregate notional value of these interest rate swap agreements was $300.0 million and the fair value was $7.9 million and $11.6 million, respectively, which is included within other assets on the Company’s Consolidated Balance Sheets.
Term Loan B Credit Agreement
On November 1, 2024, the Company entered into a Term Loan Credit Agreement with Bank of America, N.A., as administrative agent, BofA Securities, Inc., PNC Capital Markets LLC, Regions Capital Markets, a division of Regions Bank, and TD Securities (USA) LLC, each as joint lead arranger and joint bookrunner, and certain other lenders party thereto (the “Term Loan B Credit Agreement”), which provided for a senior secured term loan facility in the aggregate principal amount of $850.0 million, the full amount of which was drawn on November 1, 2024 (the “Term Loan B”). The Term Loan B proceeds were used to (i) finance the cash portion of the consideration for the Lone Star Acquisition, (ii) repay the Company’s outstanding borrowings under the Revolving Credit Facility, and (iii) pay fees and expenses incurred in connection with the foregoing debt financing transactions and the Lone Star Acquisition. The obligations of the Company and its subsidiaries under the Term Loan B Credit Agreement are secured by a security interest in substantially all of the assets of the Company and each of its subsidiaries that ranks in pari passu with the security interest of the lenders under the Term Loan A / Revolver Credit Agreement.
The Term Loan B matures on November 1, 2031 (the “Term Loan B Maturity Date”), and all outstanding principal amounts and accrued and unpaid interest thereon shall be due and payable on such date. The Company must repay the Term Loan B in equal quarterly installments, commencing with the first full fiscal quarter ending after the date of the Term Loan B Credit Agreement, in an aggregate principal amount equal to 0.25% of the principal amount of the term loan, subject to adjustment for, among other things, any incremental term loans, with the balance payable on the Term Loan B Maturity Date.
Borrowings under the Term Loan B Credit Agreement bear interest, at the Company’s option, at a rate per annum equal to (i) a forward-looking term rate based on the Secured Overnight Financing Rate for the applicable interest period (“Term SOFR”) plus an applicable margin (the “Term SOFR Loans”) or (ii) the Base Rate (as defined below) plus the applicable margin (the “Base Rate Loans”). The Base Rate means, for any day, a fluctuating rate per annum equal to the highest of (w) the federal funds rate plus 0.50%, (x) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” (y) Term SOFR plus 1.00% and (z) 1.00%. The applicable margin is (A) 2.50% in the case of Term SOFR Loans and (B) 1.50% in the case of Base Rate Loans. With respect to any Term SOFR Loans, the Company is required to pay interest on the last day of each one-, three- or six-month interest period, as elected by the Company, and, if such interest period is longer than three months, also at the end of each three-month period during such interest period. With respect to any Base Rate Loans, the Company is required to pay interest quarterly in arrears.
At September 30, 2025 and 2024, there was $843.6 million and $0.0 million, respectively, of principal outstanding under the Term Loan B.
The scheduled contractual repayment terms of long-term debt at September 30, 2025 are as follows:
| Fiscal Year | Amount | |||||||
| 2026 | $ | 38,500 | ||||||
| 2027 | 38,500 | |||||||
| 2028 | 38,500 | |||||||
| 2029 | 38,500 | |||||||
| 2030 | 481,000 | |||||||
| Thereafter | 991,125 | |||||||
| Total | $ | 1,626,125 | ||||||
Interest expense was $95.1 million, $23.2 million and $18.7 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. Amortization of deferred debt issuance costs included in interest expense was $3.8 million, $0.4 million and $0.3 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
Bridge Facility
In connection with the Lone Star Acquisition, the Company secured a bridge financing facility (the “Bridge Facility”). No amounts were drawn under the Bridge Facility, which was terminated on November 1, 2024 upon securing permanent debt financing and closing the Lone Star Acquisition. The Company incurred $3.1 million of fees associated with the Bridge Facility, which is included in interest expense, net on the accompanying Consolidated Statements of Comprehensive Income for the fiscal year ended September 30, 2025.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 25, 2025 | Showing above |
| 2024 | Nov 25, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 29, 2021 | |
| 2020 | Dec 11, 2020 | |
| 2019 | Dec 13, 2019 | |
| 2018 | Dec 14, 2018 | |
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.