Sterling Announces Extension and Expansion of Credit Facility

Rhea-AI Summary

Sterling Infrastructure (STRL) has secured an amendment to its 2019 credit agreement, extending and expanding its credit facility. The amended facility includes a $300M term loan and $150M revolving credit facility, maturing in June 2028. Key improvements include reduced quarterly repayment obligations from $6.56M to $3.75M, a 25 basis point reduction in applicable margin rates, and less restrictive covenants. The company maintains a strong cash position of $785M, with the revolving facility currently undrawn. The amendment allows for potential facility increases up to $400M or 100% of EBITDA, plus unlimited amounts up to 2.0X Total Net Leverage, providing significant flexibility for future growth through organic expansion and M&A opportunities.

Positive

• Extension of credit facility maturity to June 2028 provides long-term financial stability
• Reduction in quarterly repayment obligations from $6.56M to $3.75M improves cash flow
• 25 basis point reduction in applicable margin rates reduces borrowing costs
• Strong cash position of $785M with undrawn revolving credit facility shows financial strength
• Enhanced flexibility for future growth with ability to increase facilities by up to $400M

Negative

• $300M in outstanding term loan borrowings represents significant debt obligation
• Quarterly repayment obligations of $3.75M still impact available cash flow

Insights

Financial Analyst

Sterling secured improved credit terms that strengthen financial flexibility, reduce debt payments, and enhance M&A capacity while maintaining strong cash position.

Sterling Infrastructure has successfully extended its credit facility by three years to June 2028 while simultaneously improving the terms. The restructured package includes a $300 million term loan and a $150 million revolving credit facility that's currently undrawn, showcasing lender confidence in Sterling's financial stability.

What's particularly noteworthy is the substantial cash reserve of $785 million Sterling maintains alongside this debt arrangement - demonstrating prudent balance sheet management. The company effectively reduced its quarterly principal payments from $6.56 million to just $3.75 million, a 43% reduction that preserves approximately $11.2 million in annual cash flow.

The amended facility includes several advantageous features: the ability to increase borrowing capacity by up to $400 million or 100% of EBITDA, reduced interest margins by 25 basis points, and less restrictive covenants. These improvements significantly enhance Sterling's financial flexibility for both organic growth initiatives and potential acquisitions.

This refinancing reflects banking sector confidence in Sterling's outlook and provides the company with enhanced financial maneuvering room through mid-2028. The strengthened liquidity position, reduced debt service requirements, and expanded borrowing capacity position Sterling advantageously for executing strategic growth opportunities while maintaining financial discipline.

THE WOODLANDS, Texas, June 9, 2025 /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or "the Company") today announced that it requested and received an amendment to its 2019 credit agreement that extends the maturity of the credit facility to June 2028, expands the size of the facility, and improves flexibility. 

The amended credit facility consists of a $300 million term loan and a $150 million revolving credit facility. As of June 5, 2025, $300 million in borrowings were outstanding under the term loan, the revolving credit facility was undrawn, and cash and cash equivalents totaled $785 million. The credit agreement amendment was led by BMO Capital Markets Corp., as Joint Lead Arranger and Joint Book Runner, and BMO Bank N.A., as Administrative Agent. Bank of America, N.A. serves as Syndication Agent, and BofA Securities, Inc. as Joint Lead Arranger and Joint Book Runner.

Additional features of the amended facility include:

• The ability to increase the credit facilities by an amount not to exceed the greater of (a) $400 million or (b) 100% of the Company's EBITDA, plus an unlimited amount up to 2.0X Total Net Leverage.
   
• Loans under the Credit Facilities bear interest at either a base rate or SOFR plus an applicable margin based on the Total Net Leverage Ratio. The applicable margin rates under the amended facility were reduced by 25 basis points.
   
• Term Loans will be repaid quarterly beginning September 30, 2025, in accordance with the amortization schedule, with payments equal to 1.25% of the initial principal, or $3.75 million per quarter, and the remainder due at maturity. A reduction from the previous required quarterly payments of $6.56 million.
   
• Covenants under the amended facility are less restrictive than those under the previous agreement.

CEO Remarks

"We are fortunate to have great relationships with our key lenders and appreciate their support and confidence in our outlook," stated Joe Cutillo, Sterling's CEO. "The extension and expansion of our credit facility, combined with the enhanced flexibility of the facility, position us well as we work to grow the business both organically and through M&A opportunities."

About Sterling

Sterling Infrastructure, Inc., ("Sterling," "the Company," "we," "our" or "us") operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society's quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.

Joe Cutillo, CEO, "We build and service the infrastructure that enables our economy to run,
our people to move and our country to grow."

Company Contact:
Sterling Infrastructure, Inc.
Noelle Dilts, VP of Investor Relations and Corporate Strategy
281-214-0795
Noelle.Dilts@strlco.com 

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SOURCE Sterling Infrastructure, Inc.

FAQ

What are the key terms of Sterling Infrastructure's (STRL) amended credit facility?

The amended facility includes a $300M term loan and $150M revolving credit facility, maturing in June 2028, with quarterly repayments of $3.75M starting September 2025.

How much cash does Sterling Infrastructure (STRL) have as of June 2025?

As of June 5, 2025, Sterling Infrastructure had cash and cash equivalents totaling $785 million.

What is the maximum amount Sterling Infrastructure can increase its credit facilities?

Sterling can increase facilities by up to $400M or 100% of EBITDA, plus unlimited amounts up to 2.0X Total Net Leverage.

How does the amended credit facility benefit Sterling Infrastructure shareholders?

The amendment provides reduced borrowing costs, lower quarterly payments, extended maturity to 2028, and greater flexibility for growth through M&A, benefiting long-term shareholder value.

Who are the lead arrangers for Sterling Infrastructure's credit facility amendment?

BMO Capital Markets Corp. serves as Joint Lead Arranger and Joint Book Runner, with BMO Bank N.A. as Administrative Agent.