v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt

Note 6 – Debt

The following table summarizes the Company’s debt as of June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

Interest
Rate

 

 

Principal
Balance

 

 

Interest
Rate

 

 

Principal
Balance

 

Revolving Credit Facility (U.S. Dollar denominations)

 

 

4.76

%

 

$

260,000

 

 

 

4.95

%

 

$

189,000

 

Finance leases

 

 

10.55

%

 

 

13,258

 

 

 

3.34

%

 

 

73

 

Total debt

 

 

 

 

 

273,258

 

 

 

 

 

 

189,073

 

Less: current maturities

 

 

 

 

 

(868

)

 

 

 

 

 

(73

)

Long-term debt, less current maturities

 

 

 

 

$

272,390

 

 

 

 

 

$

189,000

 

 

Credit Agreement

On June 29, 2026, the Company entered into a Third Amended and Restated Credit Agreement (amending and restating in its entirety the Second Amended and Restated Credit Agreement, dated as of June 10, 2022, as amended) described below, the “Credit Agreement” with a consortium of lenders and Bank of America, N.A., as administrative agent (the “Agent”). The amendment, among other things, extended the maturity date to June 29, 2031.

The Credit Agreement provides for a $550,000 secured revolving credit facility (the “Revolving Credit Facility”), with a $50,000 sublimit for swing line loans and a $30,000 sublimit for the issuance of letters of credit. Any amount of the facility utilized for swing line loans or letters of credit outstanding will reduce the amount available under the Credit Agreement. Gentherm can increase the Revolving Credit Facility or establish incremental facilities subject to specified conditions.

Under the Credit Agreement, all obligations are unconditionally guaranteed by certain of the Company’s subsidiaries and a security interest is granted in substantially all of the personal property of the Company and its U.S. subsidiaries designated as borrowers or guarantors, including the stock and membership interests of specified subsidiaries. The Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability to incur additional indebtedness, create liens, pay dividends, make certain types of investments, enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. The Credit Agreement also contains customary events of default.

As of June 30, 2026, the Company was in compliance with the terms of the Credit Agreement.

Under the Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Term Secured Overnight Financing Rate (“Term SOFR Rate Loans”), plus a margin (“Applicable Rate”). The rate for Base Rate Loans is equal to the highest of the Federal Funds Rate plus 0.50%, Bank of America’s prime rate, or the Term SOFR rate plus 1.00%. The rate for Term SOFR Rate Loans denominated in U.S. Dollars is equal to the forward-looking Term SOFR rate administered by the Chicago Mercantile Exchange with a term of one month. All loans denominated in a currency other than the U.S. Dollar must use the term Canadian Overnight Repo Rate Average, Euro Interbank Offered Rate, or Sterling Overnight Index Average (depending on the currency of the borrowing), plus the Applicable rate. Additionally, a commitment fee of between 0.150% to 0.250% is payable on the daily unused amounts under the Revolving Credit Facility.

The Applicable Rate varies based on the Consolidated Net Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Credit Agreement, the lowest and highest possible Applicable Rate is 1.125% and 2.000%, respectively, for Term SOFR Rate Loans and 0.125% and 1.000%, respectively, for Base Rate Loans.

Based upon consolidated EBITDA for the trailing four fiscal quarters calculated for purposes of the Consolidated Net Leverage Ratio, $289,137 remained available for additional borrowings as of June 30, 2026.

The Company had $4,591 and $3,574 of outstanding letters of credit and other guarantees issued as of June 30, 2026 and December 31, 2025, respectively.

In connection with the Third Amended and Restated Credit Agreement, the Company incurred debt issuance costs of $2,761, which have been capitalized and will be amortized into interest expense over the term of the credit facility. In addition, unamortized deferred debt issuance costs of $75 were written-off and recognized in Interest expense, net during the three and six months ended June 30, 2026.

The scheduled maturities of our debt as of June 30, 2026 were as follows:

 

 

 

Revolving Credit Facility

 

 

Finance Leases

 

 

Total

 

2026

 

$

—

 

 

$

651

 

 

$

651

 

2027

 

 

—

 

 

 

1,381

 

 

 

1,381

 

2028

 

 

—

 

 

 

1,448

 

 

 

1,448

 

2029

 

 

—

 

 

 

1,519

 

 

 

1,519

 

2030

 

 

—

 

 

 

1,592

 

 

 

1,592

 

2031 or later

 

 

260,000

 

 

 

21,735

 

 

 

281,735

 

Total

 

$

260,000

 

 

$

28,326

 

 

$

288,326