Dentsply Sirona Gets Lenders And Noteholders To Raise Leverage Caps For Two Quarters, In Exchange For Lien And Payout Limits
An 8-K shows higher leverage limits and a $100 million EBITDA addback for the September and December quarters, with restrictions on liens and payouts.
Dentsply Sirona amended its revolving credit facility and three note purchase agreements to raise its permitted leverage ratios for the quarters ending September 30, 2026 and December 31, 2026, according to an 8-K filed Friday. The amendments are dated as of September 30, 2026, and the company obtained lender consent on Thursday.
What the amendments loosen
The filing says the company, its lenders and noteholders agreed to increase the maximum Total Leverage Ratio and the maximum Senior Leverage Ratio for those two quarters. Leverage ratios compare debt with earnings; they are the tests the company must pass to stay within its debt covenants.
The credit agreement text, in the amendment exhibit, also allows an extra addback to EBITDA (earnings before interest, taxes, depreciation and amortization) for certain cash charges or expenses incurred in the same two quarters. The addback is capped at $100 million in aggregate.
The credit amendment is a Third Amendment to a revolving facility dated May 12, 2023, with JPMorgan Chase Bank as administrative agent. That facility's initial aggregate commitment was $700 million. The three note amendments, each labeled Amendment No. 5, cover note agreements dated December 11, 2015, October 27, 2016 and June 24, 2019.
What the company gave up
Until the company delivers its compliance certificate for the fiscal year ending December 31, 2026, new liens and new subsidiary debt are generally prohibited, apart from those existing before September 30, 2026. Restricted payments are also limited, with certain carveouts.
The price rises too. The credit amendment adds a new pricing level for the applicable margin and facility fee. The note amendments increase the incremental interest payable on the notes if the total leverage ratio equals or exceeds specified thresholds.
The company says the revised terms are intended to let it maintain compliance with its debt covenants in all material respects. For holders, the filing shows the limits were raised for two quarters rather than removed.
What to watch
The fiscal 2026 compliance certificate ends the temporary lien, debt and payout restrictions. The amendments also add quarterly reporting, during a specified period, on certain initiatives and their costs and savings.
At Friday's close, per market data, the shares were at $8.83, up 1.61%.
