Southland Announces Closing of $160 Million Senior Secured Credit Facility

Rhea-AI Summary

Southland Holdings (NYSE American: SLND) has announced the closing of a new $160 million senior secured term loan facility with Callodine Commercial Finance, The facility includes a $140 million initial draw term loan and a $20 million committed delayed draw term loan, both due in 2028. From the initial $140 million, $96 million was used to refinance existing debt, $37.8 million will be available for general corporate purposes, and the remainder covers transaction costs.

The new facility replaces Southland's previous revolving credit facility and certain equipment notes. CEO Frank Renda stated that this move strengthens Southland's balance sheet and provides financial flexibility for executing their plan and pursuing opportunities in core markets. Texas Capital Securities served as the exclusive financial advisor for the transaction.

Positive

• Secured a new $160 million senior secured term loan facility
• Refinanced $96 million of existing debt
• $37.8 million available for general corporate purposes
• Extended debt maturity to 2028
• Improved financial flexibility for pursuing market opportunities

Negative

• Increased total debt burden with $160 million new facility

Insights

Financial Analyst

The closing of a $160 million senior secured credit facility is a significant financial development for Southland Holdings. This new facility, consisting of a $140 million initial draw term loan and a $20 million committed delayed draw term loan, provides substantial liquidity and financial flexibility for the company.

Key points to consider:

• Refinancing of approximately $96 million of existing debt, potentially improving the company's debt structure and terms
• $37.8 million available for general corporate purposes, boosting working capital
• Extended maturity to 2028, which could reduce near-term refinancing pressure
• Termination of the previous revolving credit facility, simplifying the capital structure

This refinancing move strengthens Southland's balance sheet and provides additional resources to pursue growth opportunities in its core markets. For investors, this could signal improved financial stability and potential for expansion, which may positively impact the company's future performance and stock value.

Infrastructure Industry Expert

Southland Holdings' new credit facility is a strategic move that aligns with the current trends in the specialized infrastructure construction sector. The $160 million facility provides Southland with enhanced financial capabilities to capitalize on the growing demand for infrastructure projects, particularly in light of recent government initiatives and spending plans.

Key industry implications:

• Increased capacity to bid on and execute larger, more complex projects
• Improved competitiveness in a sector where financial strength is important for winning contracts
• Ability to invest in advanced equipment and technologies, potentially improving operational efficiency
• Enhanced flexibility to navigate project cycles and manage working capital needs

The company's statement about pursuing "great opportunities in our core markets" suggests a positive outlook for the infrastructure sector. This financial reinforcement could position Southland to take advantage of upcoming infrastructure spending, potentially leading to increased market share and revenue growth in the coming years.

GRAPEVINE, Texas--(BUSINESS WIRE)-- Southland Holdings, Inc. (NYSE American: SLND and SLND WS) (“Southland”), a leading provider of specialized infrastructure construction services, today announced the closing of a new $160.0 million senior secured term loan facility with Callodine Commercial Finance, LLC. The new facility consists of a $140.0 million initial draw term loan and a $20.0 million committed delayed draw term loan, which are due in 2028. The delayed draw is a committed facility in which Southland may request all or a portion of the delayed draw to be available to the company.

From the initial total term loan proceeds of $140.0 million, approximately $96.0 million was used to refinance existing indebtedness, $37.8 million will be available for general corporate purposes, and the remaining will cover costs and expenses related to the transaction. Borrowings from the new facility were used to refinance Southland’s existing revolving credit facility balance in full and certain equipment notes. Concurrently with the closing, Southland terminated its previously existing revolving credit facility.

Southland’s President & Chief Executive Officer, Frank Renda, said, “This new credit facility significantly strengthens Southland’s balance sheet, while offering ample financial flexibility as we execute on our plan and continue to pursue the great opportunities in our core markets.”

Texas Capital Securities served as exclusive financial advisor to Southland on the transaction.

About Southland

Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunneling, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas. For more information, please visit Southland’s website at www.southlandholdings.com .

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Southland’s current beliefs, expectations and assumptions regarding the future of Southland’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Southland’s control. Southland’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Any forward-looking statement made by Southland in this press release is based only on information currently available to Southland and speaks only as of the date on which it is made. Southland undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241003588274/en/

Alex Murray

Corporate Development & Investor Relations

amurray@southlandholdings.com

Source: Southland Holdings, Inc.

FAQ

What is the size of Southland Holdings' new credit facility?

Southland Holdings (SLND) has secured a new $160 million senior secured term loan facility.

How will Southland Holdings use the proceeds from the new credit facility?

Southland Holdings will use $96 million to refinance existing debt, $37.8 million for general corporate purposes, and the remainder for transaction costs.

When is the maturity date for Southland Holdings' new credit facility?

The new credit facility for Southland Holdings (SLND) is due in 2028.

Who provided the new credit facility to Southland Holdings?

The new credit facility for Southland Holdings (SLND) was provided by Callodine Commercial Finance,