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Saia Inc. secures $600 million credit facility, extends maturity

EditorNatashya Angelica
Published 11/12/2024, 02:40 am
SAIA
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In a significant financial move, Saia (NASDAQ:SAIA) Inc. (market capitalization: $13.66 billion), a leading player in the trucking industry, has expanded its borrowing capacity. According to InvestingPro analysis, the company currently trades above its Fair Value, reflecting strong investor confidence in its growth trajectory.

On Monday, the company entered into an amendment to its existing credit agreement, effectively increasing its credit facility from $300 million to $600 million. This amendment, known as Amendment No. 2, also introduced an option to further augment the facility through an accordion feature, allowing for an additional $300 million subject to certain conditions and lender availability.

The amendment extends the maturity date of the credit agreement by nearly two years, from February 3, 2028, to December 9, 2029. This extension provides Saia with a longer horizon to manage its finances and investments.

Interest rates on the borrowings are variable and will be determined by either a term SOFR (secured overnight financing rate) plus 0.10% or an alternate base rate, each with an added margin that varies based on Saia's consolidated net lease adjusted leverage ratio.

The amended agreement stipulates that the margin will range between 1.25% and 2.00% per annum for term SOFR loans and between 0.25% and 1.00% per annum for alternate base rate loans.

Moreover, the company will incur fees on the unused portion of the credit facility, which are now set to range between 0.175% and 0.30%, again contingent on the company's leverage ratio. InvestingPro data shows Saia maintains a moderate debt level with a debt-to-equity ratio of 0.14 and a healthy current ratio of 1.26, indicating strong liquidity management.

Saia's strategic financial restructuring through Amendment No. 2 reflects the company's efforts to strengthen its financial position and flexibility. The details of the agreement were made public in a filing with the Securities and Exchange Commission, which includes the full text of the amendment for reference.

With the updated credit agreement, Saia Inc. positions itself for continued growth and operational expansion, ensuring it has the necessary financial resources to support its business objectives well into the future.

The company's strong financial position is reflected in its impressive 18% return on equity and revenue growth of nearly 14% over the last twelve months. For deeper insights into Saia's financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports.

In other recent news, Saia Inc. reported substantial growth in Q3 2024, achieving record revenues of $842 million, marking an 8.6% increase year-over-year. This positive trend was further supported by a significant rise in daily shipments. However, the firm experienced a slight dip in its operating ratio due to increased operational expenses.

Despite these challenges, Saia opened a record 11 new terminals in Q3 2024, bringing the total to 21 by year's end. In recent developments, Citi revised its price target for Saia to $644 and maintained a buy rating, while Stephens raised its price target to $515 from $481, maintaining an Overweight rating.

Saia's management forecasts better-than-seasonal operating ratio leverage in Q4 2024 and into 2025, driven by volume increases in the company's new terminals. The firm also projects an operating ratio improvement of 100 to 150 basis points for 2025, attributing this to anticipated increases in incremental margins as terminal start-up costs decrease.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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