Watsco, Inc. filed a Form 8-K on October 27, 2026, disclosing that on October 21, 2026, the company entered into a new unsecured, five-year $750.0 million syndicated multicurrency credit agreement, simultaneously terminating its prior $600.0 million revolving credit facility.

Key Highlights

  • New facility size: Watsco entered into a $750.0 million unsecured syndicated multicurrency credit agreement, maturing October 21, 2031.
  • Prior facility replaced: The new agreement replaces the prior unsecured $600.0 million revolving credit facility dated March 16, 2023, which terminated on the closing date.
  • Initial borrowing: The company borrowed $69.7 million under the new facility on the closing date, using the proceeds to repay outstanding borrowings under the prior facility.
  • Key sublimits: The facility includes a $125.0 million swing line loan sublimit, a $10.0 million letter of credit sublimit, and a $150.0 million multicurrency borrowing sublimit in Euros, Pounds Sterling, and Canadian Dollars.
  • Incremental capacity: The facility permits up to $375.0 million of incremental revolving increases or term loans, with up to six requests.
  • Interest rate terms: Borrowings bear interest at Term SOFR or Daily Simple SOFR-based rates plus a spread ranging from 100.0 to 137.5 basis-points, with the spread set at 100.0 basis-points as of the closing date.
  • No termination penalties: According to the filing, the company incurred no penalties in connection with the termination of the prior credit facility.

Watsco's New $750M Credit Agreement: Structure, Terms, and Transition

According to the filing, Watsco, Inc. (NYSE:WSO, NYSE:WSOB) entered into the new credit agreement on October 21, 2026, with Bank of America, N.A. serving as Administrative Agent, Swing Line Lender, and L/C Issuer, alongside a syndicate of lenders. The new facility is unsecured and has a five-year term, maturing on October 21, 2031. The company disclosed that proceeds from the initial $69.7 million borrowing were used to repay outstanding amounts under the prior facility, which was then terminated on the same date with no prepayment penalties.

The filing describes several structural features of the new agreement. In addition to the sublimits noted above, the facility provides for a seasonal period from September 1 to March 1 of each calendar year, during which the company may elect to reduce borrowing capacity by $100.0 million, $200.0 million, or $300.0 million. The commitment fee on the unused portion of the facility ranges from 10.0 to 17.5 basis-points, set at 10.0 basis-points as of the closing date. For U.S. dollar-denominated loans, the company may alternatively elect a base rate tied to the highest of the Federal Funds Rate plus 0.5%, the Administrative Agent's prime rate, one-month Term SOFR plus 1.0%, or 1.0%, plus a spread of 0 to 50 basis-points.

The filing further states that the new facility contains customary affirmative and negative covenants, including two financial covenants related to consolidated leverage and interest coverage ratios. Repayment obligations are guaranteed by substantially all of the company's wholly owned subsidiaries. The outstanding balance may be prepaid at any time without premium or penalty. A $150,000 letter of credit outstanding under the prior facility will remain in place and reduce availability under the new facility by that amount, according to the filing. The Form 8-K was signed by Ana M. Menendez, Chief Financial Officer, on October 27, 2026.

What Was Disclosed

Watsco disclosed the entry into a $750.0 million unsecured five-year multicurrency credit facility, the termination of its prior $600.0 million revolving credit facility, an initial borrowing of $69.7 million, and key structural and covenant terms of the new agreement.