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Debt
 3 Months Ended
Sep. 30, 2025
Debt  
Debt

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6.  Debt

Term Loans and Revolving Credit Facilities

2024 Credit Agreement

In July 2024, we entered into a Credit Agreement, (the “2024 Credit Agreement”) with a group of lenders. Initial borrowings were used to refinance all our outstanding debt, to pay fees and expenses of the transaction and for ongoing working capital requirements and general corporate purposes. Borrowings under the Delayed Draw Term A-1 Loans (as defined below) and Delayed Draw Term A-2 Loans (as defined below) were drawn on October 31, 2024 and used to finance the purchase price of the Acquisition discussed in “Note 3 — Acquisition.”

The 2024 Credit Agreement provides for: (i) Initial Term A-1 Loans in an initial aggregate principal amount of $162,000 (the “Initial Term A-1 Loans”), (ii) Delayed Draw Term A-1 Loans in an initial aggregate principal amount of $189,000 (the “Delayed Draw Term A-1 Loans” and, together with the Initial Term A-1 Loans, the “Term A-1 Loans”), (iii) Initial Term A-2 Loans in an initial aggregate principal amount of $138,000 (the “Initial Term A-2 Loans”), (iv) Delayed Draw Term A-2 Loans in an initial aggregate principal amount of $161,000 (the “Delayed Draw Term A-2 Loans” and, together with the Initial Term A-2 Loans, the “Term A-2 Loans”), and (v) Revolving Credit Commitments in an initial aggregate principal amount of $310,000 (the “Revolving Credit Commitments” and, together with the Term A-1 Loans and Term A-2 Loans, the “2024 Credit Facilities”). The 2024 Credit Facilities mature in July 2029 in the case of the Term A-1 Loans and the Revolving Credit Commitments and in July 2031 in the case of the Term A-2 Loans.

Borrowings under the 2024 Credit Facilities bear interest at rates based on the ratio of the Company and its subsidiaries’ net consolidated indebtedness to the Company and its subsidiaries’ consolidated EBITDA (the “Net Leverage Ratio”). The interest rates per annum for loans under the 2024 Credit Facilities are based on a fluctuating rate of interest as selected by the Company plus an applicable rate as set forth in the table below:

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Revolving Credit and
Term A-1 Loans

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Term A-2 Loans

Net Leverage Ratio

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Base rate

SOFR

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Base rate

SOFR

≥ 4.00:1.00

 

1.75

%

2.75

%

  

2.25

%

3.25

%

≥ 3.50:1.00 and < 4.00:1.00

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1.50

%

2.50

%

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2.00

%

3.00

%

≥ 2.25:1.00 and < 3.50:1.00

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1.25

%

2.25

%

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1.75

%

2.75

%

< 2.25:1.00

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1.00

%

2.00

%

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1.50

%

2.50

%

 

 

The Company may receive patronage from the lenders providing the Term A-2 Loans, to the extent eligible under such lender’s patronage program, as determined by such lender in its sole discretion.

Pursuant to the terms of the 2024 Credit Agreement, the 2024 Credit Facilities are subject to various covenants that, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted to pay distributions to stockholders out of available cash subject to certain annual limitations and a quarterly maximum Net Leverage Ratio of 4.0x and so long as no default or event of default under the 2024 Credit Facilities shall have occurred and be continuing at the time such distribution is declared. Indebtedness under the 2024 Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The 2024 Credit Agreement contains an acceleration clause should an Event of Default (as defined therein) occur.

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The 2024 Credit Agreement requires, among other things, compliance with financial covenants regarding: (i) a maximum Net Leverage Ratio and (ii) a minimum interest coverage ratio, each calculated on a trailing four-quarter basis, as follows:

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Period

maximum
Net Leverage Ratio

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minimum
interest coverage ratio

Prior to October 31, 2024

4.00:1.00

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3.00:1.00

First fiscal quarter ending after October 31, 2024 through January 3, 2026

4.75:1.00

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2.50:1.00

After January 3, 2026 to January 3, 2027

4.50:1.00

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2.75:1.00

After January 3, 2027 to January 3, 2028

4.25:1.00

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3.00:1.00

After January 3, 2028

4.00:1.00

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3.00:1.00

 

 

As of September 30, 2025, we were in compliance with the financial covenants of the 2024 Credit Agreement.

For the three months ended September 30, 2024, we paid $10,377 in lender and other fees related to the 2024 Credit Facilities, which are being amortized to interest expense through the maturity dates of the 2024 Credit Facilities. The payment of these debt issuance costs is reflected within the financing activities section of the consolidated statements of cash flows.

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As of September 30, 2025, we had $115,000 in borrowings drawn under the 2024 Revolver and had outstanding letters of credit of $2,853, leaving $192,147 available for further borrowings and letters of credit under the 2024 Revolver, subject to restrictions in our 2024 Credit Facilities. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year.

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Debt Balances and Interest Rate Information

Long-Term Debt Balances

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September 30, 

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June 30, 

As of

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2025

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2025

Term A-1 Loans due July 2029

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$

342,394

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$

344,588

Term A-2 Loans due July 2031

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291,669

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293,537

Gross term loan balances

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634,063

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638,125

Unamortized debt issuance costs

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(6,101)

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(6,440)

Term loan balances, net of unamortized debt issuance costs

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627,962

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631,685

Less: current maturities of long-term debt

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(18,444)

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(16,250)

Long-term debt

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$

609,518

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$

615,435

 

 

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Interest Rates

Interest rates as of the balance sheet dates and the weighted-average rates for the periods presented were:

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Three Months

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September 30, 

June 30, 

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Ended September 30, 

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2025

2025

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2025

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2024

​

Revolving Credit Facility

 

5.89

%

5.89

%

  

5.89

%

7.24

%

Initial Term A-1 Loan due July 2029

​

5.45

%

5.45

%

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5.45

%

3.01

%

Initial Term A-2 Loan due July 2031

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6.39

%

6.39

%

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6.39

%

3.51

%

Delayed Draw Term A-1 Loan due July 2029

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6.43

%

6.50

%

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6.39

%

—

%

Delayed Draw Term A-2 Loan due July 2031

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6.99

%

7.20

%

​

7.07

%

—

%

 

Interest rates as of the balance sheet dates are based on rates in effect as of those dates, including SOFR fluctuating rates of interest, applicable rates and the interest rate swap agreements.

In September 2024, we entered into an interest rate swap agreement on $150,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.18% through September 2029.

In March 2025, we entered into an interest rate swap agreement on $275,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities to a fixed rate of 3.64% through February 2030.

In March 2025, we entered into a forward-starting interest rate collar agreement on $250,000 of notional principal that effectively puts a floor of 1.99% and a cap of 4.75% on the floating SOFR portion of our interest obligation on that amount of debt issued under the 2024 Credit Facilities. The individual option contracts of the collar mature monthly beginning July 2025 and through June 2026.

In addition, we were party to an interest rate swap of agreement on $300,000 of notional principal that effectively converted the floating SOFR portion of our interest obligation on that amount of debt to a fixed rate of 0.51% through June 2025 as a hedge against our existing variable rate debt issued under the 2024 Credit Facilities. This swap agreement expired on June 30, 2025.

We designated the interest rate swaps and interest rate collar as highly effective cash flow hedges. For additional details, see “Note 10 — Derivatives.”