v3.25.4
Debt
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
The Company’s debt as of December 31, consisted of the following (in thousands):
20252024
Revolving credit facility$12,000 $6,500 
Term Loan facility
600,000 293,125 
Delayed Draw Term Loan facility
— 297,750 
Total borrowings
612,000 597,375 
Add: Remaining premium on interest rate caplets financed as debt83 1,076 
Total debt
612,083 598,451 
Less: Debt issuance costs(4,663)(3,072)
Total debt, net of debt issuance costs607,420 595,379 
Less: Current maturities(37,583)(34,443)
Total debt, net of current maturities$569,837 $560,936 
Prior Credit Facility
On November 13, 2019, the Company entered into a credit agreement (as amended, the “Prior Credit Facility”) as borrower, the Company and its wholly-owned domestic subsidiaries, as a guarantor, the banks, financial institutions and other lending institutions from time to time party thereto, as lenders, the other parties from time to time party thereto and Capital One, National Association, as administrative agent (in such capacity, the “Agent”), collateral agent, issuing bank and swingline lender.
The Prior Credit Facility provided for a:
•$150.0 million revolving credit facility,
•$350.0 million term loan facility, and
•$400.0 million delayed draw term (“DDTL”) loan facility.
The Company’s ability to borrow on the DDTL ended on October 22, 2024 and the maturity date of the Prior Credit Facility was October 22, 2026.
Borrowings under the Prior Credit Facility bore interest, at the Company’s option, at a rate per annum equal to either (a) the Adjusted Term SOFR (which cannot be less than 0.5%) for interest periods of 1, 2, 3 or 6 months (or if consented to by (i) each applicable lender, 12 months or any period shorter than 1 month or (ii) the administrative agent, a shorter period necessary to ensure that the end of the relevant interest period would coincide with any required amortization payment) plus the applicable SOFR margin or (b) the alternative base rate (“ABR”) plus the applicable ABR margin. ABR is a fluctuating rate per annum equal to the highest of (i) the Federal Funds Effective Rate plus 1/2 of 1.0%, (ii) the prime rate announced from time to time by Capital One, National Association or (iii) SOFR for a 1-month interest period on such day plus 1.0%.
Interest was payable quarterly in arrears for ABR loans, at the end of the applicable interest period for SOFR loans (but not less frequently than quarterly) and upon the prepayment or maturity of the underlying loans. The Company was required to pay a commitment fee quarterly in arrears in respect of unused commitments under the revolving credit facility and the additional term loan facility.
The applicable SOFR and ABR margins and the commitment fee rate were calculated based upon the first lien net leverage ratio of the Company and its restricted subsidiaries on a consolidated basis, as defined in the Prior Credit Facility. The revolving loans and term loans bore interest at either (a) ABR (150 bps floor) plus a margin up to 1.75% or (b) SOFR (50 bps floor) plus a margin up to 2.75%, at the option of the Company.
The term loans and the DDTL amortized at an annual rate equal to 5.00% per annum. Upon the consummation of certain non-ordinary course asset sales, the Company was required to apply the net cash proceeds thereof to prepay outstanding term loans and additional term loans. The loans under the Prior Credit Facility may be prepaid without premium or penalty, subject to customary SOFR “breakage” costs.
In addition, the Prior Credit Facility required the Company to maintain (a) a ratio of consolidated first lien net debt to consolidated EBITDA no greater than 4.50 to 1.00 and (b) a ratio of consolidated EBITDA to consolidated fixed charges no less than 1.20 to 1.00, in each case, tested as of the last day of each full fiscal quarter ending after the closing date and determined on the basis of the four most recently ended fiscal quarters of the Company for which financial statements have been delivered pursuant to the Prior Credit Facility, subject to customary “equity cure” rights.
New Credit Facility
In order to refinance its Prior Credit Facility, the Company entered into a credit agreement, dated as of September 10, 2025 (the “New Credit Facility”), by and among the Company, Accel Entertainment LLC (the “Borrower”), the lenders from time to time party thereto, CIBC Bank USA, as administrative agent and collateral agent for the lenders and lead arranger, Fifth Third Bank, National Association, JPMorgan Chase Bank, N.A., U.S. Bank National Association, and Truist Securities, Inc., as joint lead arrangers, and Bank of America, N.A. as documentation agent.
The New Credit Facility provides for a:
•$300.0 million revolving credit facility, including a letter of credit facility with a $15.0 million sublimit and a swing line facility with a $25.0 million sublimit, and
•$600.0 million term loan facility.
The maturity date of the New Credit Facility is September 10, 2030.
Proceeds of the initial borrowings under the New Credit Facility were used to repay in full all outstanding indebtedness and terminate all commitments under the Company’s Prior Credit Facility.
The Company incurred $4.1 million of debt issuance costs related to the New Credit Facility, of which $3.8 million are being amortized over the life of the New Credit Facility. The Company also recognized a loss on debt extinguishment of $1.1 million due to the partial extinguishment associated with a lender whose borrowing capacity decreased and the complete extinguishment for those lenders who are no longer participating.
The obligations of the Borrower under the New Credit Facility are (i) guaranteed by the Company and each of the Borrower’s existing and future material domestic subsidiaries and (ii) secured by a first-priority lien on substantially all of the assets of the Company, as well as substantially all of the assets of the Borrower and the Borrower’s existing and future material domestic subsidiaries, in each case subject to certain customary exceptions set forth in the New Credit Facility.
At the Borrower’s election, borrowings under the New Credit Facility bear interest at either (i) a base rate equal to the highest of (a) the federal funds effective rate plus 0.5%, (b) the prime rate announced by CIBC Bank USA, or (c) 1-month Term Secured Overnight Financing Rate (“Term SOFR”) plus 1% or (ii) Term SOFR for an applicable interest period, in each case plus an applicable margin. The applicable margin is determined by reference to the Borrower’s First Lien Net Leverage Ratio (as defined in the New Credit Facility) and ranges from (i) 0.75% to 1.75% for base rate borrowings and (ii) 1.5% to 2.5% for Term SOFR borrowings. As of December 31, 2025, the weighted-average interest rate on the Company’s borrowings was approximately 6.3%.
The New Credit Facility contains customary affirmative and negative covenants including limitations on the ability of the Company, the Borrower, and their restricted subsidiaries to, amongst other things, grant additional liens, incur additional indebtedness, merge or consolidate, dispose of assets, engage in certain transactions with affiliates, and make restricted payments.
The New Credit Facility also requires the Borrower to maintain, as of the last day of each fiscal quarter, (i) a First Lien Net Leverage Ratio (as defined in the New Credit Facility) no greater than 4.75 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the New Credit Facility) of at least 1.20 to 1.00. The New Credit Facility includes customary events of default, the occurrence of which could permit the administrative agent to, amongst other things, declare all amounts owing under the credit facilities to be immediately due and payable, exercise remedies with respect to the collateral, and terminate the lenders’ commitments thereunder. The failure to pay certain amounts owing under the New Credit Facility may result in an increase in the interest rate applicable thereto.
If an event of default (as such term is defined in the New Credit Facility) occurs, the lenders would be entitled to take various actions, including the acceleration of amounts due under the New Credit Facility, termination of the lenders’ commitments thereunder, foreclosure on collateral, and all other remedial actions available to a secured creditor. The failure to pay certain amounts owing under the New Credit Facility may result in an increase in the interest rate applicable thereto.The principal maturities of total debt are as follows (in thousands):
Year ending December 31:
2026$37,583 
2027$30,000 
2028$30,000 
2029$30,000 
2030$484,500 
Total Debt$612,083 
As previously mentioned in Note 2, the Company recorded temporary equity associated with a redeemable noncontrolling interest at its carrying value. If certain criteria are met, the non-controlling interest would be revalued to its estimated redemption value. The Company has excluded any amounts associated with this noncontrolling interest from the table above as the Company is uncertain as to the timing and the ultimate amount of the potential payment it may be required to make.
As of December 31, 2025, the Company had an outstanding principal payment of $7.5 million which was supposed to be timely withdrawn by the lender on December 31, 2025. The Company notified the lender of this clerical error and the $7.5 million payment was drawn by the lender on January 2, 2026.
The fair value of the Company’s debt as of December 31, 2025 and 2024, was estimated using a discounted cash flow model, which forecasts future interest and principal payments. The forecasted cash flows were discounted back to present value using the term-matched risk-free rate plus an option adjusted spread to account for credit risk. The option adjusted spread was calculated as of the debt's issuance date and then adjusted to the valuation date. The inputs used to determine the fair value were classified as Level 2 in the fair value hierarchy as defined in Note 12.
The carrying value and estimated fair value of the Company's debt as of December 31, was as follows (in thousands):
20252024
Carrying value$612,083 598,451 
Estimated fair value$612,269 $594,955 
Other Financing Activities
From time to time, the Company may take advantage of favorable financing terms offered by vendors for purchases of property and equipment. Financed property and equipment totaled $4.8 million and $0.6 million as of December 31, 2025 and 2024, respectively, of which $1.7 million and less than $0.1 million is recorded in accounts payable and other accrued expenses with the remaining $3.1 million and $0.5 million recorded in other long-term liabilities on the consolidated balance sheets for the years ended December 31, 2025, and 2024, respectively.
Interest rate caplets
The Company manages its exposure to some of its interest rate risk through the use of interest rate caplets, which are derivative financial instruments. On January 12, 2022, the Company hedged the variability of the cash flows attributable to the changes in the 1-month SOFR interest rates on the first $300 million of the term loan under our Prior Credit Facility by entering into a 4-year series of 48 deferred premium caplets (“caplets”), which remain in effect under the New Credit Facility and expired in January 2026.
The Company recognized an unrealized loss on the change in fair value of the interest rate caplets of $4.0 million, $3.8 million, and $4.3 million, net of income taxes, for the years ended December 31, 2025, 2024, and 2023 respectively. For more information on how the Company determines the fair value of the caplets, see Note 12. The Company also recognized interest income on the caplets of $6.9 million, $9.8 million, and $9.2 million for the years ended December 31, 2025, 2024, and 2023 respectively, which is reflected in interest expense, net in the consolidated statements of operations and other comprehensive income.
On January 30, 2026, the Company continued to hedge the variability of the cash flows attributable to the changes in the 1-month Term SOFR interest rate by entering into an interest rate collar. The collar, which is designated as a cash flow hedge, establishes a cap interest rate of 4.00% and a floor interest rate of 2.9215%. The interest‑rate collar is structured so its notional amount and timing exactly match the term loan’s outstanding balance and scheduled principal payments. The interest rate collar matures in September 2029.