Frontdoor, Inc. Successfully Completes Transaction to Refinance Capital Structure

June 17, 2021 at 16:05 PM EDT

Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home service plans, today announced it successfully closed a transaction to refinance its capital structure.

The company expects to reduce annual interest expense by approximately $30 million compared to 2020, lower gross debt by approximately $350 million in the first half of 2021 and extend the average debt maturity duration by approximately two years.

“This refinancing significantly reduces our annual cash interest expense and gross debt levels,” said Chief Financial Officer Brian Turcotte. “We continue to maintain significant financial flexibility as a result of the improvement in our business and capital structure over the last several years.”

Frontdoor redeemed its $350 million 6.75% Senior Notes due 2026 and refinanced its existing credit facilities with a combination of new credit facilities and cash on hand.

The new credit facilities are comprised of:

$380 million Term Loan B due 2028; priced at LIBOR + 2.25%
$260 million Term Loan A due 2026; priced based on a pricing matrix initially set at LIBOR + 1.75%
$250 million revolving credit facility maturing 2026; priced based on a pricing matrix initially set at LIBOR + 1.75%

The lenders under the new revolving credit and term loan facilities are comprised of a syndicate of financial institutions. JPMorgan Chase Bank, N.A. is acting as the administrative agent for the lenders and collateral agent for the secured parties under the new revolving credit and term loan facilities. JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, BNP Paribas Securities Corp., BofA Securities, Inc., Capital One, National Association, Citizens Bank, N.A., Fifth Third Bank, National Association, Regions Capital Markets and Wells Fargo Securities, LLC, acted as joint lead arrangers and bookrunners.

About Frontdoor

Frontdoor is a company that’s obsessed with taking the hassle out of owning a home. With services powered by people and enabled by technology, it is the parent company of four home service plan brands: American Home Shield, HSA, Landmark and OneGuard, as well as ProConnect, an on-demand membership service for home repairs and maintenance, and Streem, a technology company that enables businesses to serve customers through an enhanced augmented reality, computer vision and machine learning platform. Frontdoor serves 2.2 million customers across the U.S. through a network of approximately 17,500 pre-qualified contractor firms that employ an estimated 62,000 technicians. The company’s customizable home service plans help customers protect and maintain their homes from costly and unexpected breakdowns of essential home systems and appliances. With 50 years of home services experience, the company responds to over four million service requests annually. For details, visit frontdoorhome.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors. Readers are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. The reports filed by Frontdoor pursuant to United States securities laws contain discussions of these risks and uncertainties. Frontdoor assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are advised to review Frontdoor's filings with the United States Securities and Exchange Commission (which are available on the SEC's EDGAR database at www.sec.gov and via Frontdoor’s website at investors.frontdoorhome.com).

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