Davey Tree Expert Amends Credit Agreements to Adjust Leverage Ratios and Fees

The Davey Tree Expert Company entered into three separate amendments to its financing agreements on October 29, 2026. The filings detail changes to the company's credit facilities, note purchase agreements, and receivables financing arrangements.

The company amended the Fifth Amended and Restated Credit Agreement with KeyBank National Association (administrative agent) and PNC Bank and Wells Fargo Bank (co-syndication agents). Simultaneously, it amended the Note Purchase and Private Shelf Agreement with PGIM, Inc. (Prudential) and related affiliates. Additionally, the company executed the Sixteenth Amendment to its Receivables Financing Agreement with PNC Bank and other lenders.

The primary changes across these agreements involve the financial leverage ratio covenant. The maximum leverage ratio is now set at 4.25 to 1.00 through June 30, 2027. This limit decreases to 4.00 to 1.00 from July 1, 2027, through December 31, 2027, and further to 3.75 to 1.00 thereafter.

Regarding fees, the Sixth Amendment to the Note Purchase Agreement introduces a tiered fee structure based on the leverage ratio. If the ratio exceeds 3.00 to 1.00 as of the end of any fiscal quarter, an additional fee of 0.25% per annum applies to the outstanding private placement notes. This fee increases to 0.50% per annum if the ratio exceeds 3.50 to 1.00.

The Credit Agreement Amendment also adjusted borrowing costs and commitment fees. The Secured Overnight Financing Rate (SOFR) margin was increased from a range of 0.875% to 1.75% to a range of 0.875% to 2.00%, based on the company's leverage ratio. Commitment fees on the unused portion of the revolving credit commitment were amended from a range of 0.10% to 0.25% to a range of 0.10% to 0.275%.

Further restrictions were added regarding acquisitions and equity repurchases. The amendments require that a pro forma leverage ratio before and after any acquisition be less than 3.25 to 1.00. If the ratio is between 3.00 and 3.25, aggregate acquisitions during the preceding twelve months are limited to $10.0 million. Additionally, voluntary repurchases of equity held by directors, officers, and employees are limited to $4.0 million in cash per fiscal year if the pro forma leverage ratio exceeds 2.75 to 1.00.