Carriage Services, a provider of funeral and cemetery services and merchandise in the United States, closed a new $300 million senior secured revolving credit facility.
The new facility replaces Carriage’s existing $250 million senior secured revolving credit facility, increasing committed borrowing capacity by $50 million.
The new facility has a stated maturity of September 30, 2031, subject to a customary springing-maturity provision tied to the company’s 4.25% senior notes due 2029. It replaces the company’s previous facility, which was scheduled to mature on July 31, 2029, and included a springing-maturity provision.
Borrowings under the new facility bear interest at the Term Secured Overnight Financing Rate plus 1.25% to 2.00% or an alternate base rate plus 0.25% and 1.00%, at the company’s election, depending on the company’s total net leverage ratio at the time of the applicable borrowing.
Based on the company’s current leverage level, the new facility is expected to reduce the effective borrowing margin by approximately 50 basis points as total net leverage declines below 4.0x. The new facility also provides improved commitment-fee pricing across most leverage tiers, which is expected to meaningfully lower the company’s cost of capital, enhance expected returns on incremental growth investments, and support a disciplined balance sheet.
The company’s obligations under the new facility are guaranteed by certain wholly owned subsidiaries and secured by a first-priority lien on substantially all of the assets of the company and of the subsidiary guarantors.
The new facility provides additional flexibility to support working capital, capital expenditures, strategic acquisitions, refinancing activities and other general corporate purposes. It also includes additional covenant flexibility for qualifying acquisitions while maintaining the company’s baseline maximum leverage ratio of 5.00x and minimum fixed-charge coverage ratio of 1.20x.
“The closing of our new credit facility represents another important step in strengthening Carriage’s capital structure and advancing the company’s long-term growth strategy,” Carlos Quezada, vice chairman and CEO of Carriage Services, said. “The increased capacity, lowered costs and enhanced flexibility support our ability to invest in our premier businesses and pursue attractive acquisition opportunities while maintaining a disciplined and balanced approach to capital allocation.”
John Enwright, senior vice president, chief financial officer and treasurer of Carriage, added, “We are pleased to have proactively completed this facility with the strong support of our new and existing lending partners. The new agreement increases our committed capacity, extends our stated maturity profile and reduces borrowing spreads across the pricing grid. It also provides greater flexibility to execute our growth and capital-allocation priorities while preserving the financial discipline that remains central to our strategy.”
JPMorgan Chase Bank served as administrative agent and acted as lead left bookrunner and lead left arranger. Truist Bank and Regions Bank also acted as joint bookrunners, joint lead arrangers and co-syndication agents.
