Company: DLX
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0000027996-25-000142
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Company: DELUXE CORP
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 3
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk – We are subject to fluctuations in interest rates primarily due to our borrowing activities, which are essential for maintaining our capital structure, ensuring liquidity, and funding our business operations and investments. We do not enter into financial instruments for speculative or trading purposes. The amount and nature of our outstanding debt is expected to change based on future business needs, market conditions, and other influencing factors.

Interest on amounts outstanding under our credit agreement and accounts receivable financing arrangement is payable at variable rates, as specified in the credit agreements. As of March 31, 2025, we also had $450 million of 8.125% senior secured notes and $475 million of 8.0% senior unsecured notes outstanding. When factoring in the related discount and debt issuance costs, the effective interest rate on these notes is 8.6% and 8.3%, respectively.

Our credit agreement matures on February 1, 2029, at which point any outstanding amounts under the revolving credit facility must be repaid. The term loan facility requires periodic principal payments through December 2028, with the remaining balance due on February 1, 2029. The senior unsecured notes are scheduled to mature in June 2029, while the senior secured notes will mature in September 2029. However, if any of the senior unsecured notes issued in 2021 remain outstanding as of February 1, 2029, the 2024 senior secured notes will also mature on that date. Quantitative information regarding the maturities of our long-term debt can be found under the caption "Note 11: Debt" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.

As of March 31, 2025, our total debt outstanding was as follows:

(in thousands)Carrying amount(1)Fair value(2)Interest rateSenior secured term loan facility$486,081 $490,625 6.9 %Senior unsecured notes469,709 432,986 8.0 %Senior secured notes442,069 452,417 8.1 %Securitization obligations70,686 70,686 5.9 %Amounts drawn on revolving credit facility24,000 24,000 6.9 %Total debt$1,492,545