Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 63

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 63
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 subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our Credit Facilities are at variable rates of interest and expose us to
interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing
our indebtedness, will correspondingly decrease. Without taking into consideration the effect of our interest rate swap agreements, based upon our outstanding principal amount of floating rate debt of $1,590.4 million as of December 31,
2024 and $1,582.1 million as of June 30, 2025, an increase in the current interest rate levels of 1.00% would result in an increase in our annual interest expense of $15.9 million and $15.8 million, respectively. As of both
December 31, 2024 and June 30, 2025, we had interest rate swap agreements in effect with notional amounts of $815.0 million. We may, from time to time, enter into additional interest rate derivatives that involve a cap on our interest
rate or the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate derivatives with respect to all of our variable rate indebtedness, and any derivatives we enter
into may not fully mitigate our interest rate risk and could be subject to credit risk themselves. A material increase in our debt service obligations as a result of rising interest rates could have material adverse impact on our business, financial
condition and results of operations.

Our incurrence of additional indebtedness may affect our business and may restrict our operating flexibility.

From time to time, we may seek additional debt financing to fund the capital requirements of our business or to refinance all or a
portion of our existing indebtedness. There is no guarantee that we can continue to renew our Credit Facilities on terms as favorable as those in our existing Credit Facilities and, if we are unable to do so, our costs of borrowing and our business
may be adversely affected. The changing nature of the global credit markets could make it more difficult for us to access funds, refinance our existing indebtedness, enter into agreements for uncommitted debt bond facilities and new indebtedness,
replace our existing Credit Facilities or obtain funding through the issuance of our securities. Our inability to access credit on acceptable terms, if at all, could have a material