ACA lowers borrowing costs with $698 m SOFR-linked term loan

Rhea-AI Filing Summary

Arcosa, Inc. (NYSE: ACA) has refinanced its senior credit facility. On 17-Jun-2025 the company executed Amendment No. 2 to its Second Amended and Restated Credit Agreement, creating a new $698.25 million term loan (the “2025 Refinancing Term Loan”). Net proceeds plus cash on hand were used to fully repay the prior term loan, leaving total term-loan principal unchanged but on improved terms.

• Pricing: Borrower may choose SOFR + 2.00% or an alternate base rate + 1.00%, representing a 25 bp reduction versus the previous facility.
• Call protection: 1% premium applies only if a repricing or refinance occurs within six months; thereafter the loan is prepayable at par (SOFR breakage costs only).
• Structure: All covenants and maturities remain consistent with the prior loan; JPMorgan continues as administrative agent.
• Purpose: Pure refinancing—no new liquidity raised beyond replacing the original term loan.

The transaction marginally lowers Arcosa’s borrowing cost and gives modest flexibility without extending leverage. No off-balance-sheet obligations were created.

Positive

• Interest margin reduced by 25 bp, cutting annual cash interest by roughly $1.7 million on the $698 million balance.
• Prepayment flexibility after six months at par enhances capital structure agility.
• No incremental leverage added; proceeds solely refinanced existing debt, avoiding balance-sheet expansion.

Negative

• Floating-rate exposure to SOFR remains, leaving earnings sensitive to rate increases.
• 1% premium applies to any repricing within six months, limiting near-term optionality.

Insights

Corporate Finance Analyst

TL;DR: 25-bp cheaper $698 m refinance is modestly positive; leverage unchanged, liquidity stable.

By swapping its original term loan for the 2025 Refinancing Term Loan, Arcosa trims roughly $1.7 million in annual interest expense (0.25% × $698 m) while keeping covenant language intact. The six-month, 1% soft call provides lenders repricing protection but does not materially hinder the company’s flexibility. Because no additional debt was layered on, net leverage metrics remain the same; however, exposure to floating SOFR persists. Overall impact is incremental—helpful for margins and free cash flow, but not transformative.

Credit Risk Specialist

TL;DR: Neutral credit impact—rate cut offsets minor call premium; debt quantum unchanged.

From a creditor’s lens, the amendment lowers spread yet retains all previous safeguards. The 1% repricing fee disincentivizes rapid churn but is short-lived. Because the loan remains variable-rate, Arcosa stays exposed to SOFR volatility; still, the lower margin narrows that risk buffer. No incremental liens or guarantees were introduced, so senior secured status is preserved. Consequently, the action is seen as credit-neutral to slightly favorable.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 17, 2025

Arcosa, Inc.

__________________________________________

(Exact name of registrant as specified in its charter)

Delaware

1-38494

82-5339416

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

500 N. Akard Street, Suite 400

Dallas,

Texas

75201

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (972) 942-6500

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock ($0.01 par value)			ACA			New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01    Entry into a Material Definitive Agreement.

On June 17, 2025, Arcosa, Inc. (“Arcosa”) entered into Amendment No. 2 (the “Credit Facility Amendment”) to its existing Second Amended and Restated Credit Agreement dated as of August 23, 2023 (as previously amended, the “Existing Credit Agreement” and the Existing Credit Agreement as amended by the Credit Facility Amendment, the “Credit Agreement”), with the lenders party thereto and JPMorgan Chase Bank, N.A, as administrative agent. The Credit Facility Amendment established a new class of term loans in an aggregate principal amount of $698,250,000 (the “2025 Refinancing Term Loan”), the net proceeds of which, together with cash on hand, were used to prepay in full the outstanding term loan under the Existing Credit Agreement (the “Original Term Loan”).

The 2025 Refinancing Term Loan has a variable interest rate based, at Arcosa’s option, on the Secured Overnight Financing Rate (“SOFR”) plus 2.00% per annum, or an alternate base rate, plus 1.00% per annum, which applicable margins are 0.25% per annum less than the interest rates payable under the Original Term Loan. If Arcosa either (i) makes a prepayment of the 2025 Refinancing Term Loan in connection with a repricing transaction or (ii) effects any amendment to the Credit Agreement resulting in a repricing transaction, in either case within six months after the initial funding of the 2025 Refinancing Term Loan, Arcosa will pay a 1.0% premium on such prepaid amount or on the amount outstanding at the time such repricing transaction amendment becomes effective. Otherwise, the 2025 Refinancing Term Loan may be prepaid, in full or in part, at any time without premium or penalty (other than customary SOFR-related breakage costs). All other terms of the 2025 Refinancing Term Loan are the same as the Original Term Loan that was prepaid with the proceeds of the 2025 Refinancing Term Loan.

The description of the Credit Facility Amendment set forth under this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Credit Facility Amendment, which is attached hereto as Exhibit 10.1 and is incorporated into this Item 1.01 by reference.

Item 2.03    Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.

The information provided in Item 1.01 of this Current Report is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.			Description
10.1			Amendment No. 2 to Second Amended and Restated Credit Agreement, dated as of June 17, 2025, among Arcosa, Inc., as borrower, certain subsidiaries of Arcosa, Inc., as guarantors (for the limited purposes set forth therein), the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent.
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Arcosa, Inc.
June 18, 2025			By:			/s/ Gail M. Peck
						Name: Gail M. Peck
						Title: Chief Financial Officer

FAQ

What did Arcosa (ACA) announce in its June 17 2025 8-K?

Arcosa executed Amendment No. 2 to its credit agreement, replacing its prior term loan with a new $698.25 million refinancing term loan.

How does the new loan affect Arcosa’s interest rate?

The margin drops by 25 basis points to SOFR + 2.00% or base rate + 1.00%, lowering annual interest expense.

Does the refinancing increase Arcosa’s total debt?

No. The new loan’s proceeds were used to fully repay the existing term loan, keeping principal broadly unchanged.

Is there a prepayment penalty on the 2025 Refinancing Term Loan?

A 1% premium applies only if the loan is repriced or amended for lower pricing within six months; otherwise it is prepayable at par.

Who is the administrative agent on the amended credit facility?

JPMorgan Chase Bank, N.A. continues to serve as administrative agent.

Were any covenants or maturities changed?

The amendment states that all other terms remain the same as the original term loan.