Key Highlights

  • DXP Enterprises (NASDAQ: DXPE) finalized a $225 million asset-based revolving credit facility, split into $210 million for U.S. Operations and $15 million for Canadian subsidiaries.
  • The agreement extends maturity to July 2031 and allows for an additional $50 million in increments of $10 million.
  • A fixed charge coverage ratio covenant requires the company to maintain at least 1.00:1.00 when availability falls below a specified threshold.

Loan Structure Breakdown

The facility is divided into two segments: up to $210.0 million allocated for U.S.-based borrowers and up to $15.0 million designated for Canadian subsidiaries. The lending group includes Bank of America serving as administrative agent, lead arranger, and bookrunner, with participation from U.S. Bank and PNC Bank.

Interest and Fee Terms

Borrowing costs under the facility are linked to prevailing benchmark rates. For U.S. For Canadian dollar-denominated loans, the rate is based on Term CORRA plus a margin within the same range.

The agreement also includes fees on the unused portion of the facility, with rates beginning at 0.25%.

Collateral and Guarantees

The credit facility is secured by liens on substantially all assets of the borrowers, though restrictions apply to liens on non-U.S. Subsidiaries, which cannot exceed a specified ownership threshold. The obligations are guaranteed by DXP Enterprises and its material wholly-owned subsidiaries, with certain exemptions for designated entities.

Canadian subsidiaries do not provide guarantees for U.S. Borrower obligations, reflecting the facility’s cross-border structure.

Financial Covenants

The amended agreement includes standard affirmative and negative covenants, which limit additional indebtedness, asset dispositions, and dividend distributions. A key financial covenant requires the company to maintain a fixed charge coverage ratio of at least 1.00:1.00 when excess availability falls below a predefined level. Events of default under the agreement include failure to make payments, breach of covenants, and insolvency proceedings.

Maturity and Flexibility

The facility matures on July 2, 2031, offering long-term financial flexibility for DXP Enterprises. The revolving structure allows the company to draw funds as needed, with the option to expand borrowing capacity under the terms outlined in the agreement. This arrangement supports operational growth while maintaining disciplined financial management.

Regulatory Disclosure

DXP Enterprises filed the A&R Credit Agreement with the U.S. Securities and Exchange Commission, providing full details of the transaction’s terms. The company also issued a press release confirming the completion of the facility.

The agreement itself, offering transparency into the revised borrowing terms.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.