MAXIMUS, INC.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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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.
Jun 30, 2026 · Filed Aug 6, 2026
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7. Debt and Derivatives
- DEBT AND DERIVATIVES
| Table 7.1: Details of Debt | ||
|---|---|---|
| June 30, 2026 | September 30, 2025 | |
| (in thousands) | ||
| Term Loan A (TLA) | $819,375 | $853,125 |
| Term Loan B (TLB) | 814,173 | 493,750 |
| Revolver | 20,000 | — |
| Total debt principal | 1,653,548 | 1,346,875 |
| Less: Unamortized debt-issuance costs and discounts | (16,613) | (12,602) |
| Total debt | 1,636,935 | 1,334,273 |
| Less: Current portion of long-term debt | (71,599) | (52,680) |
| Long-term debt | $1,565,336 | $1,281,593 |
On May 27, 2026, we amended our existing credit agreement (the "Amendment") with J.P. Morgan Chase Bank, N.A. The Amendment increased our TLB by $325 million.
Our credit agreements require us to comply with a number of covenants, including leverage and interest coverage ratios. At June 30, 2026, 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 June 30, 2026 for the remainder of fiscal year 2026 through fiscal year 2031:
| Table 7.2: Details of Future Minimum Principal Payments Due | |
|---|---|
| Amount Due | |
| (in thousands) | |
| July 1, 2026 through September 30, 2026 | $18,952 |
| Year ended September 30, 2027 | 75,809 |
| Year ended September 30, 2028 | 81,434 |
| Year ended September 30, 2029 | 690,184 |
| Year ended September 30, 2030 | 8,309 |
| Years ended thereafter | 778,860 |
| Total payments | $1,653,548 |
Interest Rate Derivative Instruments
Both our TLA and TLB interest payments are comprised of an applicable margin rate and a floating rate, the latter being based on SOFR. We utilize interest rate swaps that are designed to reduce our risk from changes in floating rates, which we have designated as cash flow hedges. Effective June 1, 2026, we entered into new interest rate swap agreements to reduce interest rate risks in both our TLA and TLB. The following table presents our active interest rate swaps:
| Table 7.3: Interest Rate Derivative Instruments | |||
|---|---|---|---|
| As of June 30, 2026 | |||
| Debt Principal Hedged | Notional Amount | Fixed Interest Rate | Expiry |
| (in thousands) | |||
| Term Loan B | $75,000 | 3.72% | September 2026 |
| Term Loan B | $75,000 | 3.62% | September 2027 |
| Term Loan A | $150,000 | 3.14% | September 2027 |
| Term Loan A | $200,000 | 3.47% | September 2028 |
| Term Loan B | $75,000 | 4.04% | September 2028 |
| Term Loan A | $50,000 | 4.05% | May 2029 |
| Term Loan B | $50,000 | 4.06% | September 2029 |
The fixed interest rate on the table above identifies the payment rate to our counterparties in lieu of the floating rate.
The balance of the debt pays interest based upon the Secured Overnight Financing Rate (SOFR). At June 30, 2026, our effective interest rate, including the original issuance costs and discount rate, was 5.6%.
At June 30, 2026, we recorded an asset of $3.9 million and a liability of $0.8 million to reflect the fair value of our interest rate swap agreements, compared to an asset of $5.5 million and a liability of $1.7 million at September 30, 2025. The assets and liabilities are recorded as "other assets" and "other liabilities," respectively, within our consolidated balance sheets. As these instruments are effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive loss" on our consolidated financial statements.
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