Debt

3 Months Ended

Mar. 29, 2025

The following table sets forth the components of long-term debt:


			March 29, 2025								December 31, 2024
	Effective Interest Rate		Principal Outstanding		Unamortized Fair Value Adjustment (1)		Unamortized Discount and Issuance Costs		Carrying Amount		Principal Outstanding		Unamortized Fair Value Adjustment(1)		Unamortized Discount and Issuance Costs		Carrying Amount
Term loan facility, due April 2028	8.57	%	$	2,502,500	$	(216,277)	$	—	$	2,286,223	$	2,502,500	$	(231,851)	$	—	$	2,270,649
Term loan facility, due August 2028	9.69	%	294,000		—		(14,035)		279,965		294,000		—		(14,926)		279,074
Term loan facility, due May 2031	10.05	%	498,750		—		(4,939)		493,811		498,750		—		(5,089)		493,661
6.125% senior notes, due January 2029	13.51	%	318,699		(70,173)		—		248,526		318,699		(73,656)		—		245,043
8.750% senior secured notes, due August 2028	10.61	%	710,000		—		(33,753)		676,247		710,000		—		(36,099)		673,901
9.500% senior secured notes, due August 2029	9.88	%	500,000		—		(6,497)		493,503		500,000		—		(6,800)		493,200
Total long-term debt			$	4,823,949	$	(286,450)	$	(59,224)	$	4,478,275	$	4,823,949	$	(305,507)	$	(62,914)	$	4,455,528
Reflected as:
Current liabilities - Current portion of long-term debt									$	42,500							$	34,000
Non-current liabilities - Long-term debt									4,435,775								4,421,528
Total long-term debt									$	4,478,275							$	4,455,528
Fair value - Senior notes - Level 1									$	1,217,705							$	1,429,999
Fair value - Term loans - Level 2									2,834,976								3,167,541
Total fair value									$	4,052,681							$	4,597,540

(1) As a result of pushdown accounting in connection with the merger in July 2022, pursuant to which Cornerstone Building Brands became a privately-held company (the “Merger”), the carrying values of the term loan facility due April 2028 and the 6.125% senior notes were adjusted to fair value.

Revolving Credit Facilities

The following table sets forth the Company’s availability under its revolving credit facilities:


	March 29, 2025						December 31, 2024
	Authorized		Borrowings		Letters of Credit and Priority Payables		Authorized		Borrowings		Letters of Credit and Priority Payables
Asset-based lending facility, due May 2029(1)	$	850,000	$	170,000	$	51,518	$	850,000	$	—	$	51,374
Cash flow revolver(2)	92,000		—		—		92,000		—		—
First-in-last-out tranche asset-based lending facility, due May 2029(1)	95,000		95,000		—		95,000		95,000		—
Total	$	1,037,000	$	265,000	$	51,518	$	1,037,000	$	95,000	$	51,374

(1) As of December 31, 2024, these borrowings are included in short-term borrowings on the Consolidated Balance Sheets based on the Company’s intention and ability to repay on a short-term basis.

(2) Cash flow revolver commitment of $92.0 million will mature in May 2029.

The carrying amounts of the indebtedness under revolving credit facilities approximate fair value as the interest rates are variable and reflective of market rates.

Issuance of 9.500% Senior Secured Notes due August 2029

On August 7, 2024, the Company issued $500.0 million in aggregate principal amount of 9.500% Senior Secured Notes (“9.500% Senior Secured Notes”) due August 2029 (subject to springing maturity under certain circumstances). Interest is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2025.

The 9.500% Senior Secured Notes are secured senior indebtedness and rank equal in right of payment with all existing and future senior indebtedness of the Company, and are senior in right of payment to all existing and future subordinated indebtedness of the Company.

The Company may redeem the 9.500% Senior Secured Notes in whole or in part, subject to certain prepayment premiums if the 9.500% Senior Secured Notes were to be redeemed prior to August 15, 2028.

Term Loan Facility, due April 2028, Term Loan Facility, due May 2031 and Cash Flow Revolver

In April 2018, Ply Gem Midco entered into a Cash Flow Agreement (as amended from time to time, the “Cash Flow Credit Agreement”); facilities provided thereunder, including the Term Loan Facility, due April 2028, the Term Loan Facility, due May 2031 and the Cash Flow Revolver (each as defined below), the “Cash Flow Facilities”), which provides for (i) a term loan facility (the “Term Loan Facility, due April 2028”) in the aggregate principal amount of $2,600.0 million, issued with a discount of 0.5% and (ii) a cash flow-based revolving credit facility (the “Cash Flow Revolver”) of up to $115.0 million. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Borrower (as defined in the Cash Flow Credit Agreement). On April 11, 2023, the Company amended the Cash Flow Credit Agreement to replace the adjusted LIBOR rate with the Secured Overnight Financing Rate (“SOFR”) rate. On May 15, 2024, the Company entered into a Fifth Amendment to the Cash Flow Credit Agreement (the “Cash Flow Fifth Amendment”) to, among other things, terminate the $92.0 million of commitments under the Cash Flow Revolver and replace such commitments with $92.0 million of extended cash flow-based revolving commitments, maturing on May 15, 2029 (subject to a springing maturity under certain circumstances) and (b) incur a new incremental term loan facility (the “Term Loan Facility, due May 2031”) in the aggregate principal amount of $500.0 million, maturing on May 15, 2031 (subject to a springing maturity under certain circumstances).

The Term Loan Facility, due April 2028 amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity. The Term Loan Facility, due April 2028 bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Term SOFR rate with a credit spread adjustment of 0.10% (subject to a floor of 0.50%) plus an applicable margin of 3.25% per annum or (ii) an alternate base rate plus an applicable margin of 2.25% per annum.

Loans outstanding under the Cash Flow Revolver bear annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Daily Simple SOFR rate or a Term SOFR rate with (only in the case of Term SOFR rate borrowings with an interest period greater than one month) a credit spread adjustment of 0.10% (subject to a floor of 0.00%) plus an applicable margin ranging from 2.50% to 3.00% per annum depending on the Company’s secured leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 1.50% to 2.00% per annum depending on the Company’s secured leverage ratio. There are no amortization payments under the Cash Flow Revolver. Additionally, unused commitments under the Cash Flow Revolver are subject to a fee ranging from 0.25% to 0.50% per annum depending on the Company’s secured leverage ratio.

The Term Loan Facility, due May 2031, amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon maturity. The Term Loan Facility, due May 2031 bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Term SOFR rate (subject to a floor of 0.50%) plus an applicable margin of 4.50% per annum or (ii) an alternate base rate plus an applicable margin of 3.50% per annum.

Subject to certain exceptions, the Term Loan Facility, due April 2028 and the Term Loan Facility due May 2031 are subject to mandatory prepayments in an amount equal to:

•the net cash proceeds of (i) certain asset sales, (ii) certain debt offerings and (iii) certain insurance recovery and condemnation events; and

•50% of annual excess cash flow (as defined in the Cash Flow Credit Agreement), subject to reduction to 25% and 0% if specified secured leverage ratio targets are met to the extent that the amount of such excess cash flow exceeds $10.0 million. No payments were required in 2022 under the year 2021 excess cash flow calculation.

The Term Loan Facility, due April 2028, the Term Loan Facility, due May 2031 and the Cash Flow Revolver may be prepaid at the Company’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal amount requirements.

ABL Facility, due May 2029

On April 12, 2018, Ply Gem Midco entered into an ABL Credit Agreement (as amended from time to time, the “ABL Credit Agreement”), which provides for (a) an asset-based revolving credit facility of up to $850.0 million (amended from time to time the “ABL Facility”), a portion of which is (i) available to U.S. borrowers and (ii) available to U.S. and Canadian borrowers. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Parent Borrower (as defined in the ABL Credit Agreement) under the ABL Facility, and (b) a first-in-last-out tranche asset-based revolving credit facility of up to $95.0 million (the “ABL FILO Facility”) available to U.S. borrowers.

On May 15, 2024, the Company entered into Amendment No. 8 to the ABL Credit Agreement (“Amendment No. 8”), which amended the ABL Credit Agreement in order to terminate the existing revolving commitments under the ABL Facility and the ABL FILO Facility originally maturing on July 25, 2027 (the “Existing ABL Commitments”), and replace such Existing ABL Commitments with an extended revolving commitment of $945.0 million maturing on May 15, 2029 (subject to a springing maturity under certain circumstances), subject to the outstanding aggregate principal amount.

Borrowing availability under the ABL Facility and the ABL FILO Facility (collectively, the “ABL Facilities”) is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of eligible inventory, accounts receivable, less certain allowances and subject to certain other adjustments as set forth in the ABL Credit Agreement. Availability is reduced by issuance of letters of credit as well as any borrowings.

Loans outstanding under the ABL Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a Term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility. Additionally, unused commitments under the ABL Facility are subject to a 0.25% per annum fee.

Loans outstanding under the ABL FILO Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 2.25% to 2.75% per annum depending on the average daily excess availability under the ABL FILO Facility or (ii) an alternate base rate plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL FILO Facility. Additionally, unused commitments under the ABL FILO Facility are subject to a 0.25% per annum fee.

Covenant Compliance

The ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. The Cash Flow Credit Agreement includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter.

The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The Company is in compliance with all of its covenants as of March 29, 2025.

Interest Rate Swaps

The Company uses certain interest rate swaps to manage a portion of the interest rate risk on its term loans. The following table sets forth the terms of the Company’s interest rate swap agreements:


Notional amount	$	1,500,000
Forecasted term loan interest payments being hedged	1-month SOFR
Fixed rate paid	2.0038%
Origination date	April 17, 2023
Maturity date	April 15, 2026
Fair value at March 29, 2025 - Other assets, net	$	29,427
Fair value at December 31, 2024 - Other assets, net	$	39,159
Level in fair value hierarchy(1)	Level 2

(1)Interest rate swaps are based on cash flow hedge contracts that have fixed rate structures and are measured against market based SOFR yield curves. These interest rate swaps are classified within Level 2 of the fair value hierarchy because they are valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates.