BRP amends, extends term loans

Executive Summary

• BRP Inc. amended and partially repaid its term loan facility, reducing long‑term debt by $200 million and extending $265 million of maturities to 2029 and 2031.
• The company prepaid the entire $465 million Term Loan B‑1 (due May 2027) and increased the sizes of Term Loans B‑2 and B‑3 by $88 million and $177 million, respectively.
• Interest rates on the remaining B‑2 and B‑3 tranches were lowered by 50 basis points to SOFR + 2.25%, enhancing financial flexibility while keeping covenant‑free terms.

Key Details

• Debt Reduction: $200 million of long‑term debt eliminated through partial repayment.
• Prepayment: Full prepayment of Term Loan B‑1 ($465 million) using available liquidity.
• Upsizing:
• Term Loan B‑2 increased by $88 million (new total not disclosed).
• Term Loan B‑3 increased by $177 million (new total not disclosed).
• Maturity Extensions:
• $265 million of debt extended from 2027 to December 13, 2029 (B‑2) and January 22, 2031 (B‑3).
• Interest Rate Repricing:
• B‑2 and B‑3 rates reduced by 0.50 percentage points – from SOFR + 2.75% to SOFR + 2.25%.
• Covenant Status: All loans under the Term Loan B facility remain exempt from financial covenants.
• Strategic Rationale (CFO Quote): “Pro‑actively addressing our debt maturities continues to be an important strategy to preserve a strong balance sheet… further increase our financial flexibility to operate and invest in our long‑term growth.”

Notable Quotes

“Pro‑actively addressing our debt maturities continues to be an important strategy to preserve a strong balance sheet. The extended maturities and the associated repayment of a portion of our long‑term debt further increase our financial flexibility to operate and invest in our long‑term growth, while reinforcing our commitment to robust capital allocation practices,” – Sebastien Martel, Chief Financial Officer, BRP Inc.