Debt

3 Months Ended

Dec. 27, 2025

4. Debt

Term loan borrowings consisted of the following at the dates indicated:


(in thousands of dollars)	December 27, 2025		September 27, 2025
Term loan borrowings, net of deferred financing costs of $846 and $926, respectively	$	89,154	$	90,324
Less: current portion of long-term debt	5,000		5,000
Long-term debt, net of current portion	$	84,154	$	85,324

Term loan borrowings are recognized on the Condensed Consolidated Balance Sheets at the unpaid principal balance, and are not subject to fair value measurement; however, given the variable rates on the loans that reset frequently, the Company estimates that the unpaid principal balance approximates fair value. If measured at fair value in the financial statements, the term loans would be classified as Level 2 in the fair value hierarchy. At December 27, 2025 and September 27, 2025, $90.0 million and $91.3 million, respectively, were outstanding on the term loans.

At December 27, 2025 and September 27, 2025, the stated interest rates on the term loans were 5.9% and 6.1%, respectively. At December 27, 2025 and September 27, 2025, the weighted-average annual effective interest rates for the term loans were 6.1% and 6.6%, respectively, which include amortization of the deferred debt issuance costs.

At December 27, 2025, $8.3 million of letters of credit were outstanding, which reduces the availability on the revolving line of credit. There were no borrowings outstanding on the Revolving Credit Facility; therefore, the Company would have been able to borrow $141.7 million on the revolving line of credit.

Interest expense on all indebtedness was $1.6 million and $1.9 million for the three months ended December 27, 2025 and December 28, 2024, respectively.

The schedule of remaining principal payments through maturity for the term loans is as follows:


(in thousands of dollars)
Fiscal Year	Principal Payments
2026	$	3,750
2027	5,000
2028	5,000
2029	76,250


Total remaining principal payments	$	90,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Blue Bird Corp 10-Q