Matthews International cuts revolving credit to $650 million and secures leverage covenant relief through December 2027
Balance sheets remade by divestitures pull credit agreements out of alignment with a company's actual operating shape. Pittsburgh-based Matthews International Corporation (Nasdaq: MATW) disclosed on September 4, 2026 that it had…
Key takeaways
- Matthews International reduced its revolving credit facility to $650 million from $700 million under a Ninth Amendment entered into on September 1, 2026 and disclosed September 4, 2026.
- The amendment established a Covenant Relief Period running from the September 1, 2026 close through December 31, 2027, unless the company ends it earlier.
- Matthews Europe GmbH was released as a Foreign Borrower, cutting the foreign borrowers' revolving loan and letter-of-credit ceiling to zero from $350 million, a facility the company described as unutilized.
- Required Leverage Ratios step down during the relief period: 5.25 to 1.00 through June 30, 2027, 5.00 to 1.00 for the quarter ending September 30, 2027, and 4.75 to 1.00 for the quarter ending December 31, 2027, tightening to 4.50 to 1.00 after the period ends.
- The company's 40% interest in the Propelis Joint Venture is excluded from the Leverage Ratio calculation during the relief period, and a sale or disposition of that venture would lower the then-applicable required ratio by a further 0.50.
Balance sheets remade by divestitures pull credit agreements out of alignment with a company's actual operating shape. Pittsburgh-based Matthews International Corporation (Nasdaq: MATW) disclosed on September 4, 2026 that it had moved to close that gap, entering a Ninth Amendment to its Third Amended and Restated Loan and Security Agreement on September 1, reducing the revolving facility to $650 million from $700 million, and establishing a Covenant Relief Period through December 31, 2027.
The amendment was entered into with the banks party to the credit agreement. Chief Financial Officer Daniel E. Stopar signed the 8-K filing.
Credit structure reset after divestitures
Three changes define the Ninth Amendment. The revolving credit capacity falls to $650 million from $700 million. Matthews Europe GmbH is released and discharged as a Foreign Borrower under the credit agreement, reducing the ceiling on revolving loans and letters of credit available to all foreign borrowers to zero from $350 million; Matthews International described that foreign borrowing facility as unutilized. The company's 40% interest in the Propelis Joint Venture is also excluded from the Leverage Ratio calculation for the duration of the relief period, achieved by increasing the amount of indebtedness the company may carry in proportion to EBITDA. The filing describes the overall purpose as aligning the credit agreement with the company's structure following recent divestitures.
Leverage ratio path through December 2027
The Covenant Relief Period opens at the September 1, 2026 close and runs through December 31, 2027, unless Matthews International elects to end it earlier. During the window, required Leverage Ratios step down in stages: 5.25 to 1.00 for the four quarters through June 30, 2027; 5.00 to 1.00 for the quarter ending September 30, 2027; and 4.75 to 1.00 for the quarter ending December 31, 2027. After the relief period, the ceiling tightens to 4.50 to 1.00 as of the first quarter-end following termination. If the Propelis Joint Venture is sold or disposed of, the then-applicable required ratio falls by a further 0.50, per the filing. All other material terms of the credit agreement remain unchanged, the filing noted.
The step-down covenant schedule commits MATW to a measured path toward lower leverage through late 2027. The outstanding variable is the Propelis Joint Venture: a sale or other disposition would reduce the then-applicable required Leverage Ratio by 0.50, the one lever outside the covenant calendar that could alter the timeline.
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