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CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS
Senior Secured Credit Facilities
The Company’s senior secured credit facilities consist of a term loan B facility (“term loan B”) and a term loan A facility (“term loan A” and, together with term loan B, the “term loans”), as well as a $1.0 billion multi-currency revolving credit facility (“revolving credit facility”).
Long-term debt obligations were as follows:
June 30, 2026December 31, 2025
(In thousands)
Term loan B$450,000 $450,000 
Term loan A375,000 — 
Revolving credit facility465,953 499,552 
Deferred financing costs and original issue discount(3,567)(2,386)
Total debt1,287,386 947,166 
Less current portion of term loans(9,375)— 
Less current portion of revolving credit facility(205,953)(199,552)
Long-term debt$1,072,058 $747,614 
On June 1, 2026, the Company amended its existing senior secured credit facilities to, among other changes, issue a $375 million new term loan A facility as well as increase the borrowing capacity of its revolving credit facility from $900 million to $1.0 billion. On the closing date, the proceeds of the term loan A, together with cash on hand, were used to repay outstanding borrowings under the revolving credit facility, including all outstanding interest and related fees and expenses. In conjunction with the amendment, the Company capitalized $1.8 million in fees that will be amortized over the term of the senior secured credit facilities, of which $1.4 million related to the term loan A that have been recorded as deferred financing costs in long-term debt and $0.4 million related to the revolving credit facility that have been recorded in other assets.
On August 21, 2025, the Company amended its existing senior secured credit facilities to, among other changes, refinance the existing term loan B and to extend the maturity date. On the closing date, the Company used its revolving credit facility to prepay $50 million of the outstanding principal amount of the existing term loan B. In conjunction with the amendment, the Company recorded expense of $1.9 million and capitalized $0.2 million in fees to new lenders that have been recorded as deferred financing costs in long-term debt and will be amortized over the term of the credit facility.
On April 17, 2025, the Company amended its existing senior secured credit facilities to, among other changes, increase the borrowing capacity of its revolving credit facility from $400 million to $900 million and extend the maturity date. On the closing date, the Company used $362.5 million from its revolving credit facility to repay the outstanding balances under the previous term loan A. In conjunction with the amendment, the Company recorded expense of $0.6 million and capitalized $2.9 million in fees that have been recorded in other assets and will be amortized over the term of the revolving credit facility.
All borrowings under the credit facilities are subject to variable interest. The effective interest rate for the term loans was 5.28% and 5.47% as of June 30, 2026 and December 31, 2025, respectively, and the weighted average interest rate was 5.40% and 6.06% for the six months ended June 30, 2026 and 2025, respectively, prior to the effects of any interest rate hedge arrangements.
The effective interest rate for the revolving credit facility was 4.99% and 4.96% as of June 30, 2026 and December 31, 2025, respectively, and the weighted average interest rate was 4.97% and 5.83% for the six months ended June 30, 2026 and 2025, respectively, prior to the effects of any interest rate hedge arrangements. The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected interest period as terms may vary between under-30 day and over-30 day borrowings.
Term Loan B
As noted above, the terms of the term loan B were amended on August 21, 2025.
The term loan B matures on August 21, 2032. Borrowings under the amended term loan B bear interest at a rate per annum equal to the base rate plus a margin of 0.75% or the term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.75%. The term SOFR option is one, three or six month SOFR, as selected by the Company, or, with the approval of the applicable lenders, twelve months or less than one month term SOFR, subject to an interest rate floor of 0.50%. The base rate is the highest of (x) the prime rate quoted by The Wall Street Journal, (y) the greater of the federal funds rate and the overnight bank funding rate, in either case, plus 0.50%, and (z) one-month term SOFR plus 1.00%, subject to an interest rate floor of 1.50%.
Prior to the August 2025 amendment, the term loan B required quarterly principal payments equal to 1% per annum of the aggregate principal amount of the term loan B outstanding as of December 11, 2024, the date the Company previously amended its senior secured credit facility, with the remaining principal balance due at maturity. Effective as of December 11, 2024, borrowings under the term loan B bore interest at a rate per annum of 1.00% over the base rate, or 2.00% over the selected term SOFR rate. Effective as of January 2025, borrowings under the term loan B bore interest at a rate per annum of 0.75% over the base rate, or 1.75% over the selected term SOFR rate. The base rate was subject to an interest rate floor of 1.50% and the selected term SOFR rate was subject to an interest rate floor of 0.50%.
In February 2025, the Company voluntarily prepaid $44.5 million of the outstanding principal balance on its term loan B, which satisfied the remaining annual principal payments due until maturity. In May 2025 and August 2025, the Company utilized its revolving credit facility to prepay $39.0 million and $50.0 million, respectively, of the outstanding principal balance on its term loan B to lower borrowing costs.
Term Loan A
As noted above, the Company issued a $375 million term loan A facility on June 1, 2026.
The term loan A matures on April 17, 2030 and requires scheduled quarterly amortization payments equal to 2.5% per annum of the original aggregate principal amount of the term loan A for the period commencing September 30, 2026 through and including June 30, 2028, increasing to 5.0% per annum thereafter through March 30, 2030. The remaining principal balance is due at maturity. Borrowings under the term loan A bear interest at a rate per annum equal to the term SOFR rate plus a margin ranging from 1.25% to 1.75% or base rate plus a margin ranging from 0.25% to 0.75%. The term SOFR option is one, three or six month SOFR, as selected by the Company, or, with the approval of the applicable lenders, twelve months or less than one month SOFR, subject to an interest rate floor of 0.00%. The base rate is the highest of (x) the prime rate quoted by The Wall Street Journal, (y) the greater of the federal funds rate and the overnight bank funding rate, in either case, plus 0.50%, and (z) one-month term SOFR plus 1.00%, subject to an interest rate floor of 1.00%.
As noted above, balances outstanding under the previous term loan A facility were repaid on April 17, 2025 using availability under the revolving credit facility. Prior to the April 2025 debt amendment, the previous term loan A was scheduled to mature on November 23, 2026 and required quarterly principal payments equal to 2.5% per annum of the original aggregate principal amount of the previous term loan A in each of the first three years, 5.0% in the fourth year, and 7.5% in the fifth year. The remaining principal balance was due at maturity. Borrowings under the previous term loan A bore interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate. The base rate was subject to an interest rate floor of 1.00% and the adjusted term SOFR rate was subject to an interest rate floor of 0.00%.
Revolving Credit Facility
As noted above, the terms of the revolving credit facility were amended on June 1, 2026 and April 17, 2025.
The revolving credit facility matures on April 17, 2030. However, if there is any additional material indebtedness maturing on or before April 17, 2030, the maturity date will be 91 days prior to the maturity of that material indebtedness, unless the Company satisfies a minimum liquidity threshold test as of that date. As of June 30, 2026, the Company does not hold any material indebtedness maturing on or before April 17, 2030.
As of June 30, 2026, borrowings outstanding on the revolving credit facility were $459.5 million (composed of $365.0 million, €48.8 million and £29.3 million) and letters of credit outstanding were $20.2 million, with $520.1 million available for borrowing. Since the revolving credit facility has a contractual maturity in excess of 12 months from the balance sheet date and the Company has the ability and intends to renew borrowings of at least $260 million through June 30, 2027, such balance has been presented as long-term on the condensed consolidated balance sheet at June 30, 2026. As of December 31, 2025, borrowings outstanding on the revolving credit facility were $496.5 million (composed of $370.0 million, €71.8 million and £31.4 million) and letters of credit outstanding were $20.2 million, with $383.7 million available for borrowing.
Borrowings held in USD under the revolving credit facility bear interest at a rate per annum ranging from 0.25% to 0.75% over the base rate (as defined in the credit agreement), or 1.25% to 1.75% over the term SOFR rate. The base rate is subject to an interest rate floor of 1.00% and the term SOFR rate is subject to an interest rate floor of 0.00%. Prior to the April 17, 2025 amendment, borrowings under the revolving credit facility bore interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate.
Borrowings held in Euros under the revolving credit facility bear interest at a rate per annum equal to the Euro Interbank Offered Rate “Euribor” subject to an interest rate floor of 0.00% plus applicable margin between 1.25% and 1.75%. Borrowings held in British pounds under the revolving credit facility bear daily interest at a rate per annum equal to the Sterling Overnight Index Average rate, or SONIA, subject to an interest rate floor of 0.00% plus a 0.0326% spread adjustment in addition to an applicable margin between 1.25% and 1.75%.
In 2024, the Company entered into a AU$5 million (USD$3.3 million) uncommitted working capital credit facility in Australia for short-term borrowing purposes. In 2026, the line of credit was increased to AU$9.4 million (USD$6.5 million). As of June 30, 2026 and December 31, 2025, there were AU$9.4 million (USD$6.5 million) and AU$4.5 million (USD$3.0 million) borrowings outstanding under this facility, respectively. The effective interest rate as of June 30, 2026 and December 31, 2025 was 6.35% and 5.59%, respectively, and the weighted average interest rate for the six months ended June 30, 2026 was 6.22% for this working capital credit facility.
Debt Covenants
All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material U.S. subsidiaries. The senior secured credit facilities contain a number of covenants that, among other things and subject to certain exceptions, may restrict the ability of Bright Horizons Family Solutions LLC (the “Borrower”), the Company’s wholly-owned subsidiary, and its restricted subsidiaries, to: incur liens; make investments, loans, advances and acquisitions; incur additional indebtedness or guarantees; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; engage in transactions with affiliates; sell assets, including capital stock of the Company’s subsidiaries; alter the business conducted; enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and consolidate or merge.
In addition, the credit agreement governing the senior secured credit facilities requires Bright Horizons Capital Corp. (the “Guarantor”), the Company’s direct subsidiary, to be a passive holding company, subject to certain exceptions. The Company is the ultimate parent of the Guarantor and the Borrower and the Company’s material assets are held, and operations are conducted, by the Borrower and its subsidiaries. The term loan A and the revolving credit facility require the Borrower and its restricted subsidiaries to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00. A breach of the applicable covenant is subject to certain equity cure rights.
As of June 30, 2026, future principal payments of long-term debt are as follows for the years ending December 31:
Long-term debt
(In thousands)
Remainder of 2026$4,688 
20279,375 
202814,062 
202918,750 
2030328,125 
Thereafter450,000 
Total future principal payments$825,000 
Derivative Financial Instruments
The Company is subject to interest rate risk as all borrowings under the senior secured credit facilities are subject to variable interest rates. The Company’s risk management policy permits using derivative instruments to manage interest rates and other risks. The Company uses interest rate caps to manage a portion of the risk related to changes in cash flows from interest rate movements.
In December 2021, the Company entered into interest rate cap agreements with a total notional value of $900 million, designated and accounted for as cash flow hedges from inception. Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expired on October 31, 2025, provided the Company with interest rate protection in the event the one-month term SOFR rate increased above 2.4%. Interest rate cap agreements for $300 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.9%.
In March and July 2025, the Company entered into additional interest rate cap agreements with a total notional value of $150 million and $100 million, respectively, designated and accounted for as cash flow hedges from inception. The March and July 2025 interest rate cap agreements, both of which had forward starting effective dates of October 31, 2025, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 3.5% and 3.0%, respectively, and expire on October 31, 2027 and October 31, 2026, respectively.
In February 2026, the Company entered into an additional interest rate cap agreement with a total notional value of $150 million, designated and accounted for as a cash flow hedge from inception. The interest rate cap agreement, which has a forward starting effective date of October 30, 2026, provides the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.75%, and expires on October 31, 2027.
The fair value of the derivative financial instruments was as follows for the periods presented:
Derivative financial instrumentsConsolidated balance sheet classificationJune 30, 2026December 31, 2025
(In thousands)
Interest rate caps - assetPrepaid and other current assets$1,085 $1,763 
Interest rate caps - assetOther assets$3,023 $423 
The effect of the derivative financial instruments on other comprehensive income (loss) was as follows:
Derivatives designated as cash flow hedging instrumentsAmount of gain (loss) recognized in other comprehensive income (loss)Consolidated statement of income classificationAmount of net gain (loss) reclassified into earningsTotal effect on other comprehensive income (loss)
(In thousands)(In thousands)
Three months ended June 30, 2026
Cash flow hedges$913 Interest expense — net$181 $732 
Income tax effect(239)Income tax expense(47)(192)
Net of income taxes$674 $134 $540 
Three months ended June 30, 2025
Cash flow hedges$237 Interest expense — net$3,202 $(2,965)
Income tax effect(63)Income tax expense(854)791 
Net of income taxes$174 $2,348 $(2,174)
Derivatives designated as cash flow hedging instrumentsAmount of gain (loss) recognized in other comprehensive income (loss)Consolidated statement of income classificationAmount of net gain (loss) reclassified into earningsTotal effect on other comprehensive income (loss)
(In thousands)(In thousands)
Six months ended June 30, 2026
Cash flow hedges$2,707 Interest expense — net$401 $2,306 
Income tax effect(709)Income tax expense(105)(604)
Net of income taxes$1,998 $296 $1,702 
Six months ended June 30, 2025
Cash flow hedges$(666)Interest expense — net$6,409 $(7,075)
Income tax effect178 Income tax expense(1,711)1,889 
Net of income taxes$(488)$4,698 $(5,186)
During the next 12 months, the Company estimates that a net gain of $1.0 million, pre-tax, will be reclassified from accumulated other comprehensive loss and recorded as a reduction to interest expense related to these derivative financial instruments.