MAXIMUS INC
For the period ended Dec 31, 2023. Filed Feb 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2023 · Filed Feb 8, 2024
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6. Debt and Derivatives
- DEBT AND DERIVATIVES
| Table 6.1: Details of Debt | ||
|---|---|---|
| December 31, 2023 | September 30, 2023 | |
| (in thousands) | ||
| Term Loan A, due 2026 | $888,750 | $909,375 |
| Term Loan B, due 2028 | 344,052 | 344,934 |
| Revolver | 80,000 | — |
| Subsidiary loan agreements | 6,818 | 3,220 |
| Total debt principal | 1,319,620 | 1,257,529 |
| Less: Unamortized debt-issuance costs and discounts | (6,934) | (7,536) |
| Total debt | 1,312,686 | 1,249,993 |
| Less: Current portion of long-term debt | (90,443) | (86,844) |
| Long-term debt | $1,222,243 | $1,163,149 |
Our credit agreements require us to comply with a number of covenants, including leverage and interest coverage ratios. At December 31, 2023, we are 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 following table sets forth future minimum principal payments due under our debt obligations as of December 31, 2023 for the remainder of fiscal year 2024 through fiscal year 2028:
| Table 6.2: Details of Future Minimum Principal Payments Due | |
|---|---|
| Amount Due | |
| (in thousands) | |
| January 1, 2024 through September 30, 2024 | $71,340 |
| Year ended September 30, 2025 | 92,903 |
| Year ended September 30, 2026 | 821,028 |
| Year ended September 30, 2027 | 3,528 |
| Year ended September 30, 2028 | 330,821 |
| Total Payments | $1,319,620 |
Interest Rate Derivative Instruments
To reduce our interest rate credit risk, we entered into interest-rate swap agreements covering $650 million of our Term Loan A, effectively setting a fixed rate for a portion of our debt. The balance of the debt pays interest based upon an index. At December 31, 2023, our effective interest rate, including the original issuance costs and discount rate, was 6.0%.
At December 31, 2023, we recorded an asset of $21.2 million and a liability of $2.2 million to reflect the fair value of these interest rate swap agreements, compared to an asset of $31.0 million at September 30, 2023. The asset and liability are recorded as "other assets" and "other liabilities," respectively, within our consolidated balance sheet.
Our interest rate agreement for a notional amount of $150 million expires in September 2024; the remaining balance of our swap agreements expires in May 2026, concurrent with the maturity of Term Loan A.
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