Polaris Announces Amendment to Existing Credit Agreement and Full Prepayment of Senior Notes

Rhea-AI Summary

Polaris (NYSE: PII), the global powersports leader, has announced significant changes to its debt structure and credit agreements. The company has fully repaid $350 million of senior notes due 2028 using revolving loans from its senior credit facilities.

The company has also amended its existing credit facilities, originally dated July 2, 2018, with key modifications including: extending the incremental term loan maturity to June 26, 2026, modifying financial covenants through June 30, 2026, and maintaining ability to pay regular quarterly dividends while restricting additional dividend payments and certain subsidiary-level debt during the covenant relief period.

Positive

• Proactive management of debt structure through full prepayment of $350 million senior notes
• Extended maturity date of incremental term loan to June 2026
• Maintained ability to pay regular quarterly dividends and repurchase shares to offset equity plan dilution
• Enhanced financial flexibility through modified covenant terms

Negative

• Restrictions on additional dividend payments beyond regular quarterly dividends during covenant relief period
• Limitations on subsidiary-level debt during covenant relief period
• Ongoing challenges from dynamic tariff environment necessitating covenant relief

Covenant Relief Enhances Financial Flexibility and Supports Long-Term Growth

MINNEAPOLIS, July 2, 2025 /PRNewswire/ -- Polaris Inc. (NYSE: PII), the global leader in powersports, today announced that on June 27, 2025 it executed an amendment to its existing credit facilities, originally dated July 2, 2018. In addition, the company also fully repaid all $350 million of outstanding senior notes due 2028. The debt prepayment was funded through revolving loans under the company's senior credit facilities.

The amendment modifies the existing credit agreement to include several key updates:

• Extension of Maturity: The maturity date of the incremental term loan has been extended to June 26, 2026.
• Covenant Relief Period: Financial covenants have been modified for the period from June 30, 2025 through June 30, 2026, or an earlier date as designated by Polaris.
• Limitations During Covenant Relief Period: Polaris can continue to pay its regular quarterly dividend as approved by the Polaris Inc. Board of Directors and repurchase shares to offset dilution from equity plans. Polaris will be restricted from paying dividends beyond regular quarterly dividends, and from incurring certain subsidiary-level debt, subject to certain exceptions.

The amended credit agreement remains subject to covenants and events of default that are generally consistent with the prior agreement.

Polaris Chief Financial Officer Bob Mack commented, "As we continue to navigate a dynamic tariff environment, we have proactively amended our existing bank credit facility to allow more covenant flexibility within the agreement. We appreciate the continued partnership from our bank group in supporting our focus on long-term growth and profitability that we believe will enable us to emerge stronger from this dynamic period and reinforce our position as the industry leader in powersports."

For more information, please refer to the full text of the amendment filed as Exhibit 10.1 to Polaris' Current Report on Form 8-K.

About Polaris
As the global leader in powersports, Polaris Inc. (NYSE: PII) pioneers product breakthroughs and enriching experiences and services that have invited people to discover the joy of being outdoors since our founding in 1954. Polaris' high-quality product line-up includes the RANGER, RZR, Polaris XPEDITION, and GENERAL side-by-side off-road vehicles; Sportsman all-terrain off-road vehicles; military and commercial off-road vehicles; snowmobiles; Indian Motorcycle mid-size and heavyweight motorcycles; Slingshot moto-roadsters; Aixam quadricycles; Goupil electric vehicles; and pontoon and deck boats, including industry-leading Bennington pontoons. Polaris enhances the riding experience with a robust portfolio of parts, garments, and accessories. Headquartered in Minnesota, Polaris serves nearly 100 countries across the globe. www.polaris.com

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SOURCE Polaris Inc.

FAQ

What changes did Polaris (PII) make to its credit agreement in July 2025?

Polaris amended its credit facilities by extending the incremental term loan maturity to June 26, 2026, modifying financial covenants through June 2026, and maintaining regular dividend payments while restricting additional dividends and certain subsidiary-level debt.

How much senior notes did Polaris (PII) prepay in July 2025?

Polaris fully prepaid $350 million of outstanding senior notes that were due in 2028, funding the prepayment through revolving loans under its senior credit facilities.

Will Polaris (PII) continue paying dividends under the new credit agreement?

Yes, Polaris can continue paying its regular quarterly dividends as approved by the Board of Directors, but is restricted from paying additional dividends beyond the regular quarterly payments during the covenant relief period.

How long does Polaris (PII) covenant relief period last?

The covenant relief period extends from June 30, 2025 through June 30, 2026, or an earlier date as designated by Polaris.

Why did Polaris (PII) amend its credit agreement in 2025?

Polaris proactively amended its credit agreement to gain more covenant flexibility while navigating a dynamic tariff environment, supporting its focus on long-term growth and profitability.