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DEBT
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
DEBT DEBT
The current portion of long-term debt consisted of the following:
September 30, 2025December 31, 2024
Current portion of 7.5% senior notes due 2030
$75.7 $76.0 
Debt issuance discount and fees(1.2)(1.2)
Total short-term borrowings and current portion of long-term debt$74.5 $74.8 
Long-term debt consisted of the following:
September 30, 2025December 31, 2024
7.5% senior notes due 2030
$494.3 $494.0 
Senior secured term loan A due 2028417.3 417.3 
Senior secured term loan B due 2030154.7 154.7 
Senior secured revolving credit facility
— — 
Debt issuance discount and fees(14.2)(16.3)
Total long-term debt$1,052.1 $1,049.7 
During the three and nine months ended September 30, 2024, the Company paid down $0.0 and $70.2, respectively, on its senior secured term loan A due 2028 (“term loan A”) and $0.0 and $412.5, respectively, on its senior secured term loan B due 2030 (“term loan B”). Additionally, in the second quarter of 2024, the Company wrote off $12.2 of unamortized debt issuance costs associated with the pay down of debt, which were recorded in interest expense in the condensed consolidated statements of operations during the nine months ended September 30, 2024.
Senior Notes
On June 27, 2023, the Company issued $570.0 aggregate principal amount of 7.50% senior notes due 2030 (the “Notes”). Interest on these notes is payable semi-annually on January 1 and July 1 of each year. Net proceeds from the offering of the Notes were $560.2 after deducting expenses of the offering.
The bond indenture for the Notes contains an asset sale covenant that effectively requires the Company to utilize a prorated portion of the Net Cash Proceeds from an Asset Sale, each as defined in the indenture, to retire Notes at par. As a result of Fortrea’s sale of assets relating to its Enabling Services Segment, Fortrea intends to repurchase up to $75.7 of the Notes in accordance with the terms of the indenture by the end of November 2025, which amount has been classified as current portion of long-term debt in the consolidated balance sheet as of September 30, 2025.
Credit Facilities
On June 30, 2023, Fortrea entered into a credit agreement (as amended, the “Credit Agreement”) providing for (i) a senior secured revolving credit facility in the principal amount of up to $450.0; (ii) a five-year $500.0 first lien senior secured term A loan facility; and (iii) a seven-year $570.0 first lien senior secured term B loan facility. The initial revolving facility includes a $75.0 swingline sub-facility and a $75.0 letter of credit sub-facility.
The Company drew on the term loan A and term loan B on June 30, 2023. The net proceeds received for the term A and term B loans were $491.8 and $552.9, respectively after deducting underwriting discounts and other expenses. The term A and term B loans will mature on June 30, 2028 and June 30, 2030, respectively. The term loans accrue interest at a per annum rate equal to the sum of, at the option of the Company, a Base Rate or a Term SOFR Rate and the Applicable Margin as defined by the Credit Agreement. As of September 30, 2025, the effective interest rate on the term loan A and term loan B was 6.26% and 8.06%, respectively.
The revolving credit facility is permitted, subject to certain covenant restrictions, to be used for general corporate purposes, including working capital and capital expenditures. There were no balances outstanding on the Company’s revolving credit facility and there were $2.3 in letters of credit issued under the letter of credit sublimit, resulting in $447.7 available for borrowing as of September 30, 2025. No balances were outstanding as of December 31, 2024. As of September 30, 2025, the effective interest rate on the revolving credit facility was 6.16%, assuming a one-month interest election. There is an annual agency fee associated with the Credit Agreement ($0.1 paid in quarterly installments) and a variable commitment fee associated with the revolving credit facility based on the Company’s Total Leverage Ratio as defined under the Credit Agreement. As of September 30, 2025, the commitment fee was 0.30% (per annum and paid quarterly). The credit facility matures on June 30, 2028.
Under the Credit Agreement, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for similarly rated borrowers, and the Company is required to maintain certain net leverage and interest coverage ratios. The Company is permitted to make adjustments, such as excluding certain costs, from the calculation of leverage and interest coverage ratios for compliance purposes. On February 28, 2025, the Company entered into an amendment to modify certain financial covenants for additional flexibility under the Credit Agreement. The Company was in compliance with all covenants in the Credit Agreement at September 30, 2025 and believes it will be in compliance with all covenants for a period of at least 12 months from the date these financial statements are issued.