Frontdoor successfully closed a transaction to refinance its capital structure.

The new credit facilities are comprised of:

• $380 million Term Loan B due 2028; priced at LIBOR + 2.25%
• $260 million Term Loan A due 2026; priced based on a pricing matrix initially set at LIBOR + 1.75%
• $250 million revolving credit facility maturing 2026; priced based on a pricing matrix initially set at LIBOR + 1.75%

The lenders under the new revolving credit and term loan facilities are comprised of a syndicate of financial institutions. JPMorgan Chase Bank is acting as the administrative agent for the lenders and collateral agent for the secured parties under the new revolving credit and term loan facilities. JPMorgan Chase Bank, Goldman Sachs Bank USA, BNP Paribas Securities, BofA Securities, Capital One, Citizens Bank, Fifth Third Bank, Regions Capital Markets and Wells Fargo Securities, acted as joint lead arrangers and bookrunners.

The company expects to reduce annual interest expense by approximately $30 million compared to 2020, lower gross debt by approximately $350 million in the first half of 2021 and extend the average debt maturity duration by approximately two years.

“This refinancing significantly reduces our annual cash interest expense and gross debt levels,” said Chief Financial Officer Brian Turcotte. “We continue to maintain significant financial flexibility as a result of the improvement in our business and capital structure over the last several years.”

Frontdoor redeemed its $350 million 6.75% Senior Notes due 2026 and refinanced its existing credit facilities with a combination of new credit facilities and cash on hand.