Open report — full analysis, no account required.
Sign up to generate reports and read filings that aren't on the open list.
Get notified when REZI files again. Create a free account and we'll email you the moment its next filing is analyzed.
Get filing alertsResideo refinances $2.8B credit facilities to enable ADI Global Distribution spin-off
Filed June 4, 2026 · Period ending June 2, 2026 · ~2 min read
Key Changes
-
high
Resideo restructured its debt with $2.3B in term loans and a new $500M undrawn revolver, specifically designed to facilitate the planned separation of its ADI Global Distribution segment from the products and solutions business.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
high
Leverage covenant steps up to 4.75:1.00 for two quarters post-spin (from 3.50:1.00 currently), then gradually tightens to 4.00:1.00, providing breathing room as Resideo adjusts to operating without ADI's cash flows.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
Interest margins increase 25 basis points after the spin-off completes (to 2.25% on SOFR loans, 1.25% on ABR loans), reflecting the smaller scale and different risk profile of the remaining business.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
medium
CEO Thomas Surran's compensation set at $900K base salary, 135% bonus target ($1.22M at target), and $1.58M equity grant vesting over three years, effective upon ADI spin-off completion expected mid-Q3 to mid-Q4 2026.
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation verify on EDGAR → -
medium
Term loan maturities are staggered from February 2028 to August 2032, with the new revolver maturing June 2031, spreading refinancing risk over six years.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
Resideo has refinanced its entire capital structure with approximately $2.8 billion in senior secured financing, a transaction explicitly designed to enable the company's planned spin-off of ADI Global Distribution to shareholders. The new credit agreement includes three term loan facilities totaling $2.3 billion and a $500 million senior secured revolving facility that was undrawn at closing.
The financing structure anticipates the business separation: interest rates step up 25 basis points after the spin-off, and the leverage covenant temporarily relaxes from 3.50:1.00 to 4.75:1.00 for the first two quarters post-separation before gradually tightening back to 4.00:1.00.
For shareholders, this refinancing removes a key obstacle to completing the ADI spin-off, expected between mid-third quarter and mid-fourth quarter 2026. The stepped leverage covenant is particularly significant—it acknowledges that Resideo will be a smaller company after losing ADI's revenue and cash flow, and provides financial flexibility during the transition period. The higher post-spin interest costs and the need for covenant relief signal that the remaining products and solutions business will carry proportionally more debt relative to its earnings capacity. Investors should monitor whether the company can operate comfortably within the 4.75:1.00 initial covenant and whether the path back to 4.00:1.00 leverage proves achievable as the covenants tighten over subsequent quarters, secured by a first-priority lien on substantially all assets of the borrower and guarantors.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Resideo refinanced its credit facilities, establishing $2.8B in senior secured financing to facilitate the planned spin-off of its ADI Global Distribution segment.
Added in current filing · verify on EDGAR →
The Second Amended and Restated Credit Agreement provides for senior secured financing of up to approximately $2,827 million, consisting of: ●an existing senior secured term B loan facility in an aggregate principal amount of approximately $518 million (the “Initial Term Loan Facility”); ●an existing senior secured term B loan facility in an aggregate principal amount of approximately $590 million (the “Fourth Amendment Term Loan Facility”); ●an existing senior secured term B loan facility in an aggregate principal amount of approximately $1,219 million (the “Sixth Amendment Term Loan Facility” and, together with the Initial Term Loan Facility and the Fourth Amendment Term Loan Facility, the “Term Loan Facilities”, and the loans incurred under the Term Loan facilities, the “Term Loans”); and ●a new senior secured revolving credit facility, which refinanced in full the existing senior secured revolving credit facility, which provides for commitments in an aggregate principal amount of $500 million, which are undrawn as of the Second Amendment and Restatement Effective Date (the “Revolving Credit Facility” and, together with the Term Loan Facilities, the “Senior Credit Facilities”).
Resideo entered into a Second Amendment and Restatement Agreement on June 4, 2026, restructuring its credit facilities to provide approximately $2.8 billion in senior secured financing. The refinancing includes three existing term loan facilities totaling approximately $2.3 billion and a new $500 million senior secured revolving credit facility that replaced the prior revolver. The revolving facility was undrawn at closing, and no new borrowings occurred on the effective date, secured by a first-priority lien on substantially all assets of the borrower and guarantors.
Added in current filing · verify on EDGAR →
The Second Amendment and Restatement Agreement was entered into in order to, among other changes, facilitate the previously disclosed proposed spin-off of the Company’s ADI Global Distribution segment to its common shareholders.
The credit agreement refinancing was specifically structured to enable Resideo's planned spin-off of its ADI Global Distribution business to shareholders. The agreement includes provisions permitting the company to execute the spin-off transaction and related actions, representing a significant corporate restructuring that will separate the distribution segment from the products and solutions business.
Added in current filing · verify on EDGAR →
The applicable margin for the Term Loan Facilities is (a) before the separation of the Company’s ADI Global Distribution business from its products and solutions business completed through a pro rata distribution of all of the outstanding shares of common stock of ADI Global Distribution Inc., a wholly-owned subsidiary of the Company, to the Company’s common stockholders and the making of a distribution by ADI Global Distribution Inc., the proceeds of which shall be applied to voluntarily prepay the Term Loans (the “ADI Spin-Off Transaction”), 2.00% per annum (for SOFR loans) and 1.00% per annum (for ABR loans) and (b) after the ADI Spin-Off Transaction is consummated, 2.25% per annum (for SOFR loans) and 1.25% per annum (for ABR loans).
The term loan interest rates are structured to increase after the ADI spin-off is completed. Before the spin-off, SOFR-based loans carry a 2.00% margin and ABR loans carry 1.00%; after the spin-off, these margins increase to 2.25% and 1.25% respectively. This 25-basis-point step-up reflects the reduced scale and potentially different risk profile of the remaining business post-separation.
Added in current filing · verify on EDGAR →
In addition, the Second Amended and Restated Credit Agreement contains financial covenants applicable to the Revolving Credit Facility requiring the maintenance of a consolidated total leverage ratio not to exceed (i) for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter of the Company (each such date, a “CTLR Testing Date”) prior to the fiscal quarter in which the ADI Spin-Off Transaction is consummated, 3.50:1.00, (ii) 4.75:1.00 for the first two CTLR Testing Dates ending after the date on which the ADI Spin-Off Transaction is consummated, (iii) 4.50:1.00 for the third and fourth CTLR Testing Dates ending after the date on which the ADI Spin-Off Transaction is consummated, (iv) 4.25:1.00 for the fifth and sixth CTLR Testing Dates ending after the date on which the ADI Spin-Off Transaction is consummated and (v) 4.00:1.00
The credit agreement establishes a stepped leverage covenant that provides significant flexibility immediately following the ADI spin-off. The maximum leverage ratio is currently 3.50:1.00, then increases to 4.75:1.00 for the first two quarters post-spin, before gradually stepping down to 4.50:1.00, then 4.25:1.00, and ultimately 4.00:1.00. This structure gives Resideo breathing room to adjust to operating as a smaller, standalone entity after losing the ADI segment's cash flows.
Added in current filing · verify on EDGAR →
The Revolving Credit Facility matures five years after the Second Amendment and Restatement Effective Date, with certain extension rights in the discretion of each lender. The Initial Term Loan Facility matures February 12, 2028, the Fourth Amendment Term Loan Facility matures June 14, 2031, and the Sixth Amendment Term Loan Facility matures August 13, 2032, in each case with certain extension rights in the discretion of each lender.
The new revolving credit facility matures in June 2031 (five years from the June 4, 2026 effective date). The three term loan facilities have staggered maturities: the Initial Term Loan in February 2028, the Fourth Amendment facility in June 2031, and the Sixth Amendment facility in August 2032. This laddered maturity profile spreads refinancing risk over a six-year period.
Event · Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation filed; see Key Changes for terms.
Show 1 minor / wording change
Added in current filing · verify on EDGAR →
Mr. Surran will continue to be eligible for the severance benefits provided to the Company’s other executive officers under the Resideo Technologies, Inc. Severance Plan for Designated Officers in effect at the time of his separation
Surran will participate in the company's standard executive severance plan, requiring execution of a separation agreement with release of claims to receive benefits. He will also receive company-paid premiums for $5,000,000 personal liability umbrella coverage and an annual executive physical benefit valued up to $7,500.
Thanks — your feedback helps us improve report quality.
Figures/quotes linked to EDGAR · Narrative written by AI · Jun 21, 2026 · How we verify