Consensus Cloud Solutions adds $225 m liquidity with new secured revolver & term loan

Rhea-AI Filing Summary

Consensus Cloud Solutions (CCSI) secured a new $225 million senior-secured credit facility, executed 9 July 2025, comprising (i) a $75 million revolving line and (ii) a $150 million delayed-draw term loan available until 15 October 2026. The facility matures 10 July 2028 and immediately replaces the company’s prior revolver, which was retired at a zero balance, thereby expanding total committed liquidity without raising current debt.

Economics: Loans bear either a base rate +0.50%-1.25% or SOFR +1.50%-2.25%, depending on total net leverage. Management anticipates drawing in 4Q 25 at SOFR + 1.75%. Voluntary prepayments and commitment reductions carry no penalties other than customary breakage.

Security & Guarantees: Obligations are guaranteed by all wholly-owned material domestic subsidiaries and secured by substantially all company and guarantor assets, providing lenders with first-lien collateral.

Covenants: Quarterly tests include (1) a maximum total net leverage ratio and (2) a minimum fixed-charge coverage ratio. Additional negative covenants restrict dividends, voluntary repayment of the outstanding $500 million 6.5% 2028 notes, incremental indebtedness, acquisitions, asset sales, affiliate transactions, liens, and mergers.

Current position: As of 14 July 2025, no amounts are outstanding. The agreement therefore bolsters near-term liquidity and funding flexibility ahead of anticipated borrowing later in FY 25, while subjecting CCSI to tighter leverage discipline and granting lenders priority claims on assets.

Positive

• $225 million total committed capacity enhances liquidity with no current drawdown.
• Competitive pricing (SOFR +1.50%-2.25%) signals lender confidence and manageable borrowing costs.
• Refinances prior revolver, eliminating near-term refinancing risk until 2028.

Negative

• First-lien security subordinates existing unsecured noteholders.
• Restrictive covenants limit dividends, acquisitions and additional debt, potentially constraining strategic flexibility if leverage rises.

Insights

Financial Analyst

TL;DR: New $225 m secured credit line boosts liquidity but adds covenants; no immediate leverage impact.

The facility materially increases committed liquidity, giving CCSI headroom for working capital, bolt-on M&A or refinancing needs. Pricing at SOFR + 1.75% (current leverage) is competitive for a first-lien structure, indicating a solid credit profile. Retirement of the prior revolver suggests a proactive balance-sheet refresh. Covenants are customary but will cap shareholder returns and incremental debt until leverage moderates. Because no funds are drawn, there is no immediate EPS drag; however, secured liens subordinate existing unsecured noteholders, and any future draws will elevate leverage. Overall impact is positive for liquidity, neutral for equity value until utilization occurs.

Credit Risk Specialist

TL;DR: First-lien, asset-backed facility with leverage & coverage tests strengthens lender position; moderate credit-profile impact.

From a creditor perspective, the agreement tightens the capital structure: comprehensive collateral and subsidiary guarantees, leverage-linked pricing and quarterly maintenance covenants improve lender protection. Replacement of the prior revolver eradicates refinancing risk through 2028. Restrictions on dividends and voluntary note repurchase preserve cash, mitigating subordination risk for noteholders. Should CCSI fully draw the DDTL, secured leverage could rise materially, but covenants provide an automatic check. Impact is modestly positive for credit quality and liquidity, but neutral-to-slightly negative for existing unsecured bondholders due to lien subordination.

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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) July 9, 2025

Consensus Cloud Solutions, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-40750

87-1139414

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

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

700 S. Flower Street, 15th Floor
Los Angeles, California 90017

(Address of principal executive offices) (Zip Code)

(323) 860-9200

(Registrant's telephone number, including area code)

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 (see General Instruction A.2. below):

☐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

CCSI

Nasdaq Stock Market LLC

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 July 9, 2025, Consensus Cloud Solutions, Inc. (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) with certain lenders party thereto (the “Lenders”) and U.S. Bank National Association, as agent (the “Agent”). Pursuant to the Credit Agreement, the Lenders have provided the Company with a senior secured revolving credit facility of $75.0 million (the “Revolving Credit Facility”) and a senior secured delayed-draw term loan facility of $150.0 million (the “DDTL Facility” and together with the Revolving Credit Facility, the “Credit Facility”). The final maturity of the Credit Facility will occur on July 10, 2028, subject to limited customary accelerators. Subject to the terms and conditions of the Credit Agreement, the Company may (i) borrow, repay and reborrow revolving loans at any time during the term of the facility and (ii) the Company may borrow under the DDTL Facility until October 15, 2026, but amounts that are prepaid or repaid may not be reborrowed. Voluntary prepayments of loans and voluntary reductions of unused commitments under the Credit Agreement are permissible without penalty (other than customary interest breakage charges). As of July 14, 2025, no amount had been drawn down on the Credit Facility. The Credit Facility is guaranteed by each wholly-owned material domestic subsidiary of the Company, and secured by substantially all assets of the Company and the guarantors, subject to other customary exceptions. The interest rate applicable to the loans made under the Credit Facility are, at the Company’s option, equal to either a base rate or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin based on the total net leverage ratio (0.50%-1.25% in the case of base rate loans and 1.50%-2.25% in the case of SOFR loans). The Company expects to draw funds in the last fiscal quarter of 2025 and based on its current leverage would expect an interest rate of SOFR plus an applicable margin of 1.75%. In connection with entering into the Credit Facility, the Company’s existing senior secured revolving credit facility agented by U.S. Bank National Association (as successor-in-interest to MUFG Bank, N.A.) was retired with no balance.

The Credit Facility is subject to a maximum total net leverage ratio covenant and a minimum fixed charges coverage ratio covenant, in each case tested on a quarterly basis. The Credit Agreement contains covenants that, subject to certain exceptions, restrict the Company’s ability to: (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments (including certain voluntary payments in respect of the Company’s $500 million 6.5% senior notes due 2028); (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; (vi) incur indebtedness, (vii) make acquisitions and other investments and (viii) transfer and sell assets.

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

The information set forth in Item 1.01 above is incorporated herein by reference into this Item 2.03.

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.

Consensus Cloud Solutions, Inc. (Registrant)

Date:

July 14, 2025

By:

/s/ Vithya Aubee

Vithya Aubee Vice President and Secretary

FAQ

What is the size of Consensus Cloud Solutions' new credit facility?

The company obtained a $75 million revolver plus a $150 million delayed-draw term loan, totaling $225 million.

When does the new CCSI credit facility mature?

The facility matures on 10 July 2028.

What interest rate will CCSI pay on the new loans?

Loans bear either a base rate or SOFR plus 1.50%-2.25%; management expects SOFR + 1.75% based on current leverage.

Has Consensus Cloud Solutions drawn any funds yet?

No. As of 14 July 2025, no amounts were outstanding under the facility.

What key covenants are associated with the credit agreement?

CCSI must maintain a maximum total net leverage ratio and a minimum fixed-charge coverage ratio, tested quarterly, and faces limits on dividends and additional debt.

Which assets secure the new credit facility for CCSI?

The facility is secured by substantially all assets of the company and its material domestic subsidiaries.