On October 21, 2026, Watsco, Inc. entered into a new unsecured, five-year syndicated multicurrency credit agreement (the “New Credit Facility”) with a syndicate of lenders and Bank of America, N.A. as Administrative Agent, Swing Line Lender, and L/C Issuer. The agreement replaces the company's prior revolving credit facility, which terminated on the same date.
The New Credit Facility has a total commitment of $750.0 million. On the closing date, Watsco borrowed $69.7 million under the new agreement, using the proceeds to repay outstanding borrowings from the prior facility. The facility matures on October 21, 2031.
Borrowings under the New Credit Facility may be used for seasonal working capital needs, general corporate purposes, acquisitions, dividends, capital expenditures, stock repurchases, and issuances of letters of credit. The agreement includes specific sublimits for a swing line loan ($125.0 million), a letter of credit ($10.0 million), and multicurrency borrowings in Euros, Pounds Sterling, and Canadian Dollars ($150.0 million).
The terms of the facility allow for up to $375.0 million of incremental revolving increases or term loans, with up to six requests. It also includes a seasonal period from September 1 to March 1 of each year, during which the company may reduce its borrowing capacity by $100.0 million, $200.0 million, or $300.0 million.
Interest rates under the New Credit Facility vary based on the type of advance selected. Borrowings may bear interest at Term SOFR or Daily Simple SOFR-based rates plus a spread ranging from 100.0 to 137.5 basis-points, or, for U.S. dollar-denominated loans only, based on the Federal Funds Rate, prime rate, or one-month Term SOFR plus a spread ranging from 0 to 50 basis-points. The company pays a variable commitment fee on the unused portion of the commitment, ranging from 10.0 to 17.5 basis-points. The outstanding balance may be prepaid at any time without premium or penalty.
The New Credit Facility contains customary affirmative and negative covenants, financial covenants regarding consolidated leverage and interest coverage ratios, events of default, and remedies. The company’s performance and payment obligations are guaranteed by substantially all of its wholly owned subsidiaries.
