FirstService Increases Credit Facility to US$1.75 Billion

Rhea-AI Summary

FirstService (FSV) has announced the expansion and extension of its unsecured revolving credit facility to US$1.75 billion, up from US$1.25 billion, with a new five-year term maturing in February 2030. The facility includes an option to increase by an additional US$250 million under the same terms.

The credit facility, which was substantially oversubscribed by a syndicate of 11 banks led by The Toronto-Dominion Bank, will be used for working capital, general corporate purposes, and funding future tuck-under acquisitions. Combined with US$185 million in outstanding private long-term senior notes, this financing maintains FirstService's strong, investment-grade balance sheet.

FirstService generates over US$5.2 billion in annual revenues and employs approximately 30,000 people across North America through its two main platforms: FirstService Residential and FirstService Brands.

Positive

• Credit facility increased by US$500M to US$1.75B
• Option to increase facility by additional US$250M
• Extended maturity to 2030 from 2027
• Facility was substantially oversubscribed
• Maintains investment-grade balance sheet

Negative

• Increased debt exposure and financial obligations
• Higher potential interest expenses

Insights

Financial Analyst

FirstService's expansion of its credit facility from US$1.25 billion to US$1.75 billion represents a 40% increase in borrowing capacity, while extending the maturity timeline by three years to 2030. This substantial upsize, coupled with the facility being "substantially oversubscribed," signals strong institutional confidence in FirstService's financial health and growth trajectory.

The timing of this refinancing is strategic - executing two years ahead of the previous facility's expiration suggests management is capitalizing on favorable credit conditions while securing long-term capital access. For a company with US$5.2 billion in annual revenue and a $7.9 billion market cap, this expanded facility provides significant firepower for their acquisition-driven growth strategy.

FirstService has historically grown through "tuck-under acquisitions" - smaller, complementary businesses that integrate into their existing operational platforms. This expanded facility likely indicates an acceleration of this strategy, particularly important in the fragmented property services sector where scale advantages are significant.

The syndicate's expansion to 11 major banks (including TD, JP Morgan, and Bank of America) further validates FirstService's investment-grade profile. When combined with their US$185 million in long-term senior notes, the company has constructed a balanced debt structure that maintains flexibility while managing interest rate exposure.

For investors, this facility expansion suggests management anticipates substantial growth opportunities that exceed their organic cash flow generation capacity. The property services sector continues to consolidate, and FirstService is positioning itself as a primary aggregator with the financial resources to capitalize on market dislocations and strategic opportunities across both its residential management and property services platforms.

TORONTO, Feb. 26, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) (“FirstService”) announced today that it has expanded and extended its unsecured revolving credit facility (the “Credit Facility”) for a new five-year term maturing in February 2030, replacing the prior facility which was set to expire in February 2027. Under the amended Credit Facility, borrowing capacity has been increased to US$1.75 billion up from the previous US$1.25 billion and, at any time during the term, FirstService also has the right to increase the Credit Facility by up to an additional US$250 million on the same terms and conditions as the original Credit Facility. The Credit Facility will continue to be utilized for working capital and general corporate purposes and to fund future tuck-under acquisitions.

The financing was substantially oversubscribed by its syndicate of 11 banks, led by The Toronto-Dominion Bank and including JP Morgan Chase Bank, Bank of America, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, U.S. Bank, Desjardins, National Bank of Canada, Royal Bank of Canada and Raymond James Bank.

“We appreciate the long-standing relationship with our banking group and their continued confidence and support with this financing. This transaction enhances our capacity and financial flexibility to fund future growth initiatives across our businesses,” said Jeremy Rakusin, Chief Financial Officer. “The Credit Facility, together with our outstanding tranches of privately-held long-term senior notes aggregating US$185 million, provides us with a healthy balance of attractively priced debt financing and maintains our strong, investment-grade balance sheet,” he concluded.

About FirstService Corporation

FirstService Corporation is a North American leader in the property services sector, serving its customers through two industry-leading service platforms: FirstService Residential – North America's largest manager of residential communities; and FirstService Brands – one of North America's largest providers of essential property services delivered through individually branded company-owned operations and franchise systems.

FirstService generates more than US$5.2 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ and the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 Index. More information is available at www.firstservice.com.        

Forward-looking Statements
This press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2024 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise.

COMPANY CONTACTS:

D. Scott Patterson
Chief Executive Officer        

Jeremy Rakusin
Chief Financial Officer

(416) 960-9566

FAQ

What is the new credit facility amount for FirstService (FSV) and when does it mature?

FirstService's new credit facility is US$1.75 billion, maturing in February 2030, with an option to increase by US$250 million.

How much did FirstService (FSV) increase its credit facility compared to the previous amount?

FirstService increased its credit facility by US$500 million, from US$1.25 billion to US$1.75 billion.

What will FirstService (FSV) use the expanded credit facility for?

The credit facility will be used for working capital, general corporate purposes, and funding future tuck-under acquisitions.

How many banks are in the syndicate supporting FirstService's (FSV) credit facility?

The credit facility is supported by a syndicate of 11 banks, led by The Toronto-Dominion Bank.

What is FirstService's (FSV) current annual revenue and employee count?

FirstService generates over US$5.2 billion in annual revenues and has approximately 30,000 employees across North America.