TREX CO INC 8-K

What Happened
Trex Company, Inc. announced on March 26, 2026 that it entered into an amended and restated Credit Agreement with a syndicate of banks led by Bank of America, N.A. (Administrative Agent). The new facility increases the revolving loan capacity to a $700,000,000 aggregate commitment (up from $550,000,000 under the prior agreement), extends the term to March 26, 2031, and includes the issuance of Notes that give Trex the ability to borrow up to the Loan Limit during the term. The agreement is secured by a Security and Pledge Agreement granting the agent a continuing security interest in substantially all of Trex’s specified assets.

Key Details

• Facility size and term: $700,000,000 revolving loan commitment; maturity March 26, 2031. Prior facility was $550,000,000 and would have matured Dec. 22, 2026.
• Sublimits: Letter of Credit up to $60,000,000; Swing Line Loans up to $40,000,000.
• Pricing and rates: Loans priced at either Base Rate + Applicable Rate or Term SOFR + Applicable Rate. Applicable Rate tiers range from 1.00%–1.75% (Term SOFR loans) depending on consolidated debt/EBITDA; base rate margins from 0.00%–0.75%; revolving commitment fee 0.125%–0.25%. Default interest margin = +2.00% if an Event of Default occurs.
• Financial covenants: Consolidated Interest Coverage Ratio ≥ 2.50:1.0; Consolidated Debt / Consolidated EBITDA ≤ 3.75:1.0 (auto-increases to 4.25:1.0 for specified quarters after a qualifying cash acquisition ≥ $75M). Equity cure permitted with limits (must fund with common equity and subject to frequency limits).
• Security: Broad collateral package covering accounts, cash, inventory, IP (patents, trademarks, copyrights), pledged equity, deposit accounts, software, and proceeds, subject to customary exclusions.

Why It Matters
This agreement secures Trex’s near- and medium-term liquidity by increasing available revolving credit and extending the maturity profile to 2031, which reduces near-term refinancing risk. The secured nature of the facility and the financial covenants mean the lenders have priority claims on specified assets and Trex must maintain certain leverage and coverage levels; covenant breaches could restrict dividends, buybacks or trigger default remedies. Pricing is tied to leverage, so borrowing costs will increase if Trex’s leverage rises, while the equity cure provides a limited option to remedy covenant shortfalls with cash equity.