BRP reduces long-term debt by $200 million, extends loan maturities

VALCOURT, Quebec - BRP Inc. (TSX:DOO) (NASDAQ:DOOO), currently trading at $60.81 and showing strong momentum with a 67% return over the past six months, has amended, extended and repriced a significant portion of its term loan facility, reducing its long-term debt by $200 million and extending the maturity dates for $265 million of debt, according to a company press release. According to InvestingPro analysis, the company maintains a FAIR financial health score of 2.26.

The powersports vehicle manufacturer extended debt maturities from 2027 to 2029 and 2031 while also lowering the average interest rate on its term facility.

As part of the restructuring, BRP prepaid its entire $465 million Term Loan B-1 that was due in May 2027. The company utilized available liquidity, an $88 million upsize of its Term Loan B-2 due December 2029, and a $177 million upsize of its Term Loan B-3 due January 2031.

The company also reduced the interest rate on its Term Loan B-2 and B-3 tranches by 50 basis points, from Term SOFR plus 2.75% to Term SOFR plus 2.25%. Other terms and conditions, including the maturity dates, remain substantially unchanged.

"Proactively addressing our debt maturities continues to be an important strategy to preserve a strong balance sheet," said Sébastien Martel, Chief Financial Officer of BRP, in the press release.

BRP, headquartered in Quebec, Canada, reported annual sales of CA$7.8 billion from over 130 countries as of January 31, 2025. The company’s portfolio includes brands such as Ski-Doo, Sea-Doo, Can-Am, and Rotax marine propulsion systems. InvestingPro data shows the company has maintained dividend payments for 9 consecutive years, with analysts expecting net income growth this year.

All loans outstanding under the Term Loan B facility remain exempt from financial covenants, according to the company statement.

In other recent news, BRP Inc. reported its second-quarter 2025 earnings, significantly surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.92, nearly doubling the forecasted $0.4613, resulting in a 99.44% positive surprise. Additionally, BRP’s revenue reached $1.9 billion, exceeding projections by 6.18%. These results highlight the company’s strong financial performance in the quarter. In another development, Bain Capital Integral Investors II, L.P. completed a secondary offering of 1.5 million subordinate voting shares of BRP at C$90.71 per share, generating C$136,065,000. The transaction was facilitated by BMO Capital Markets, with all proceeds directed to Bain Capital. This offering reduced Bain Capital’s stake in BRP from approximately 16.4% to 14.4% and decreased its voting power from 27.1% to 24.4%. These recent developments are noteworthy for investors monitoring BRP’s financial and ownership landscape.

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