STERLING INFRASTRUCTURE, INC.STRL
STERLING INFRASTRUCTURE, INC. Debt Disclosure
| 9. | DEBT | ||||
The Company’s outstanding debt was as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Term Loan Facility | $ | 292,500 | $ | 317,188 | |||||||
| Revolving Credit Facility | — | — | |||||||||
| Credit Facility | 292,500 | 317,188 | |||||||||
| Other debt | 382 | 554 | |||||||||
| Total debt | 292,882 | 317,742 | |||||||||
| Less - Current maturities of long-term debt | (15,146) | (26,423) | |||||||||
| Less - Unamortized debt issuance costs | (1,833) | (1,421) | |||||||||
| Total long-term debt | $ | 275,903 | $ | 289,898 | |||||||
Credit Facility—On June 5, 2025, the Company and the subsidiary guarantors entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) that provides the Company with senior secured debt financing consisting of the following (collectively, the “Credit Facility”): (i) a senior secured first lien term loan facility (the “Term Loan Facility”) in the aggregate principal amount of $300,000 and (ii) a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $150,000 (with a $75,000 limit for the issuance of letters of credit and a $15,000 sublimit for swing line loans). The obligations under the Credit Facility are secured by substantially all assets of the Company and the subsidiary guarantors, subject to certain permitted liens and other customary exceptions. The Credit Facility will mature on June 5, 2028.
The Credit Agreement also includes rights to increase the Credit Facility in an amount not to exceed the greater of (a) $400,000 or (b) 100% of the Company’s EBITDA (as such term is defined in the Amended Credit Agreement) for the four fiscal quarter period then ended for which financial statements have been delivered less the amount of any Additional Indebtedness (as defined in the Amended Credit Agreement) incurred pursuant to clause (a), plus an unlimited amount so long as the Net Leverage Ratio (as defined in the Amended Credit Agreement), after giving pro forma effect to the incurrence or issuance of such Additional Indebtedness (assuming such Additional Indebtedness is fully drawn) and the application of proceeds therefrom and any other transaction in connection therewith, but without netting the proceeds of such Additional Indebtedness when calculating the Total Net Leverage Ratio, is less than or equal to 2:00 to 1:00 as of the date of the four fiscal quarter period then ended for which financial statements are available.
The Credit Agreement contains various affirmative and negative covenants that may, subject to certain exceptions, restrict the ability of us and our subsidiaries to, among other things, grant liens, incur additional indebtedness, make loans, advances or other investments, make non-ordinary course asset sales, declare or pay dividends or make other distributions with respect to equity interests, purchase, redeem or otherwise acquire or retire capital stock or other equity interests, or merge or consolidate with any other person, among various other things. In addition, the Company is required to maintain the following financial covenants:
•a Total Net Leverage Ratio (as defined in the Credit Agreement) at the last day of each fiscal quarter not to be greater than 3.00 to 1.00; provided that as long as there is no event of default at such time or would result therefrom, not more
than twice during the term of the Credit Facility, the Company may elect a “covenant holiday” to increase the Total Leverage Ratio to be not greater than 3.50 to 1.00 for a period of four consecutive fiscal quarters in connection with a permitted acquisition in excess of $100,000 occurring during the first quarter of such period; provided further that there must be a two-quarter break between covenant holidays; and
•an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 as of the last day of each fiscal quarter of the Company.
As specified in the Credit Agreement, the loans under the Credit Facility bear interest at a base rate or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin based on the Total Net Leverage Ratio, at the Company’s election. At December 31, 2025, the Company calculated interest using a SOFR rate of 3.77% and an applicable margin of 1.25% per annum, and had a weighted average interest rate of approximately 5.56% per annum for the year ended December 31, 2025. Scheduled principal payments on the Term Loan Facility are made quarterly and total approximately $15,000, $15,000 and $3,750 for the years ending 2026, 2027 and 2028, respectively. A final payment of all principal and interest then outstanding on the Term Loan Facility is due on June 5, 2028. During 2025, the Company made term loan payments of $24,688. Repayments under the Term Loan Facility may not be reborrowed under the terms of the Credit Agreement.
In addition to interest on debt borrowings, we are assessed quarterly commitment fees on the unutilized portion of the Revolving Credit Facility as well as letter of credit fees on outstanding instruments. At December 31, 2025, we had no outstanding borrowings under the $150,000 Revolving Credit Facility. Borrowings under the Revolving Credit Facility may be repaid and reborrowed under the terms of the Credit Agreement.
Debt Issuance Costs—The Company incurred $1,409 of fees relating to the amendment and restatement of the Credit Facility in the second quarter of 2025. The costs associated with the Credit Facility are reflected on the Consolidated Balance Sheets as a direct reduction from the related debt liability and amortized over the term of the facility. Amortization of debt issuance costs was $997, $1,344 and $2,026 for the years ended December 31, 2025, 2024 and 2023, respectively, and was recorded as interest expense.
Compliance and Other—As of December 31, 2025, we were in compliance with all of our restrictive and financial covenants. The Company’s debt is recorded at its carrying amount in the Consolidated Balance Sheets. Based upon the current market rates for debt with similar credit risk and maturities, at December 31, 2025 and 2024, the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 3, 2021 | |
| 2019 | Mar 3, 2020 | |
| 2018 | Mar 5, 2019 | |
| 2017 | Mar 6, 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.