Southland Holdings (SLND) shifts $110M term debt to sureties and gains waivers
Rhea-AI Filing Summary
Southland Holdings, Inc. has restructured its term loan facilities and shifted its primary lenders to its surety providers. The company entered into an Assignment and Assumption Agreement under which approximately $15.4 million was paid to the resigning agent, including about $14.4 million of principal and $1.0 million of accrued interest and fees.
Existing lenders assigned about $110.0 million in loan principal under the Credit Agreement to surety assignees, and the delayed draw term loan commitment was terminated. The sureties agreed to waive quarterly principal and monthly interest payments until maturity, as well as all existing defaults and covenant violations, in exchange for the company disposing of idle equipment and other assets and using those proceeds to reduce principal.
The company also notes that Berkshire, Zurich, and Markel have advanced a collective $116 million under general indemnity agreements for bonded projects, with repayment not required before March 27, 2027. Southland is working with the sureties on both an amendment to the Credit Agreement and a longer-term financing arrangement, although it states there can be no assurances that such agreements will be reached.
Positive
- None.
Negative
- Reliance on sureties and covenant waivers underscores financial strain: Approximately $110.0 million of term loans and $116 million of surety advances are now concentrated with surety providers, who have waived prior defaults and payments only temporarily, while future amendments and long-term financing remain uncertain.
Insights
Southland shifts $110M term debt to sureties, gains waivers but signals financing stress.
Southland Holdings is effectively migrating its senior lending relationship from a traditional agent to its surety providers. About $110.0 million of term loans were assigned to the sureties, and a delayed draw commitment was terminated, tightening future liquidity options from this facility.
The sureties have already advanced roughly $116 million under general indemnity agreements to keep bonded projects moving, and now hold the loan exposure as well. They granted waivers of quarterly principal, monthly interest payments, and all existing defaults and covenant violations, which helps near-term cash flow but highlights prior covenant pressure.
In return, Southland agreed to sell idle equipment and other assets and apply proceeds to loan principal before maturity. Repayment of GIA advances is deferred until March 27, 2027. The company is negotiating an amendment to the Credit Agreement and a long-term financing arrangement with the sureties, while explicitly cautioning there is no assurance of successful outcomes.
8-K Event Classification
FAQ
What material agreement did Southland Holdings (SLND) enter into on March 17, 2026?
How much debt was reassigned under Southland Holdings’ Credit Agreement?
What payment and covenant relief did Southland Holdings receive from its sureties?
How much have Berkshire, Zurich, and Markel advanced to Southland Holdings under GIAs?
What did Southland Holdings agree to do in exchange for surety waivers?
Is Southland Holdings working on any further financing changes with its sureties?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
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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).
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Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, Southland Holdings, Inc. and its subsidiaries (the “Company”) are parties to a term loan and security agreement dated as of September 30, 2024 (as amended, the “Credit Agreement”). On March 17, 2026, the Company entered into an assignment and assumption (the “Assignment and Assumption Agreement”) with Callodine Commercial Finance, LLC (the “Resigning Agent”), solely in its capacity as “Agent” under the Credit Agreement, lenders party to the Credit Agreement (individually, an “Assignor,” and collectively, the “Assignors”), the assignees parties thereto (individually, an “Assignee,” and collectively, the “Assignees,” or “Sureties”), and Alana Porrazzo, in her capacity as Trustee of the Southland Collateral Trust, as successor agent. The Assignees include the sureties previously reported by the Company as having advanced funds under general indemnity agreements.
Pursuant to the Assignment and Assumption Agreement, the Company paid the Resigning Agent, for the benefit of the Resigning Agent and the Assignors, approximately $15.4 million with respect to the loans of which approximately $14.4 million consisted of principal and approximately $1.0 million consisted of accrued interest and fees. Also, each Assignor sold and assigned to the Assignees, and each Assignee purchased and assumed from the Assignors, all of each such Assignor’s (i) right, title and interest to loans under the Credit Agreement, and (ii) rights and obligations, solely as a lender, under the Credit Agreement and related loan documents (including the Assignor’s right, title and interest in any collateral securing obligations under the Credit Agreement) (the “Assigned Interest”). The aggregate principal amount of loans comprising the Assigned Interest is approximately $110.0 million, and the Assignees agreed to pay an aggregate purchase price of approximately $110.0 million to the Resigning Agent for the ratable benefit of the Assignors.
Concurrently with the assignment of the Assigned Interests, the delayed draw term loan commitment under the Credit Agreement was terminated and is of no further force or effect.
The foregoing summary of the Assignment and Assumption Agreement does not purport to be complete and is qualified in its entirety by the full text of the Assignment and Assumption Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Additionally, pursuant to side letters executed after the Assignment and Assumption Agreement, the Sureties have agreed to waive quarterly principal and monthly interest payments for all periods until maturity. In addition, the Sureties have agreed to waive any and all defaults and covenant violations under the Credit Agreement. As consideration for the foregoing, the Company has agreed to dispose of idle equipment and other assets and pursue claim collections to use the proceeds from the aforementioned transactions to make payments towards the principal balance of the loan prior to maturity. The Company is actively working with the Sureties on an amendment to the Credit Agreement. There can be no assurances that an amendment to the Credit Agreement will be reached.
Item 8.01 Other Events.
In its industry, the Company is generally required to provide surety performance and payment bonds guaranteeing the Company’s completion of projects and guaranteeing payment to subcontractors and suppliers.
As previously disclosed by the Company in Current Reports on Form 8-K filed on December 31, 2025, January 16, 2026, and February 4, 2026, Berkshire Hathaway Specialty Insurance Company (“Berkshire”), Zurich American Insurance Company (“Zurich”), and Markel Insurance Company (“Markel”), respectively, have agreed to advance funds under general indemnity agreements (“GIAs”) for the payment of bonded construction contract obligations and for the continued progress of such projects.
Pursuant to such GIAs, Berkshire, Zurich, and Markel have collectively advanced an aggregate of approximately $116 million as of the date of this filing. The Sureties have agreed repayment will not be required prior to March 27, 2027. Additionally, the Company is actively working with the Sureties towards a long-term financing arrangement. There can be no assurances that a resolution of a long-term financing arrangement will be reached.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 10.1 | Assignment and Assumption, dated as of March 17, 2026, by and among the Company, Callodine Commercial Finance, LLC, as the Resigning Agent, the Assignors, the Assignees, and Alana Porrazzo, in her capacity as Trustee of the Southland Collateral Trust, as successor agent. | |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) |
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SIGNATURE
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.
| Dated: March 23, 2026 | SOUTHLAND HOLDINGS, INC. | ||
| By: | /s/ Frank S. Renda | ||
| Name: | Frank S. Renda | ||
| Title: | President and Chief Executive Officer | ||
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