WillScot Holdings has arranged forward-starting interest-rate swaps covering $300 million of its variable-rate borrowings under its asset-based credit facility. The agreements take effect June 30, 2027, and are intended to reduce the company’s exposure to changes in interest rates through June 30, 2030.
- WillScot’s subsidiary Williams Scotsman will pay fixed rates and receive one-month Term SOFR under both swaps:
- A $200 million swap with MUFG Bank at a fixed rate of 4.3451%.
- A $100 million swap with Capital One at a fixed rate of 4.3450%.
- The swaps hedge the cash-flow impact of interest-rate changes on variable-rate debt under WillScot’s ABL facility.
- Because the agreements do not take effect until June 2027, they do not change the interest expense on that debt before then. They also do not replace or repay the underlying borrowings.
Implications: The arrangements set a fixed benchmark rate on $300 million of covered debt for the three-year swap period, reducing WillScot’s sensitivity to movements in SOFR on that portion. The filing does not specify the facility’s borrowing spread, so the swaps’ fixed rates are not the all-in cost of the debt.