The covenant relief and EBITDA addback suggest management expects elevated leverage through year-end 2026. Monitor the Q3 2026 earnings release for the actual leverage ratio and details on the Specified Addback Matter. The next quarterly noteholder call (per Section 7.5) should provide updated projections through September 2027.
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Executive Summary
Dentsply Sirona entered into a Third Amendment to its $700M revolving credit facility and a Fifth Amendment to its 2016 Note Purchase Agreement, both dated September 30, 2026. The amendments relax financial covenants (Total Leverage Ratio and Senior Leverage Ratio) for fiscal quarters ending September 30, 2026 and December 31, 2026, and add a $100M EBITDA addback for a 'Specified Addback Matter' in Q3 and Q4 2026. The note amendment also increases the leverage-based interest step-up thresholds and caps the total step-up at 2.00% (from 1.75%). These changes provide the company with additional covenant headroom during a period of elevated leverage.
Key Facts
- Third Amendment to $700M revolving credit facility dated September 30, 2026
- Fifth Amendment to 2016 Note Purchase Agreement dated September 30, 2026
- Total Leverage Ratio covenant relaxed to 4.25x for Q3 and Q4 2026 (from 4.00x)
- Senior Leverage Ratio covenant relaxed to 3.25x for Q3 and Q4 2026 (from 3.00x)
- New $100M EBITDA addback for 'Specified Addback Matter' in Q3 and Q4 2026
- Leverage step-up thresholds increased: 0.75% for leverage >=4.00x, 0.50% for 3.75x-4.00x
- Total interest rate step-up cap increased to 2.00% per annum (from 1.75%)
- Noteholders received a 0.25% amendment fee
- Restricted payments limited to $25M per quarter during Specified Period
- Lien and debt baskets tied to 5% of Consolidated Net Worth (previously a fixed dollar amount)
Financial Impact
Covenant relaxation provides ~0.25x additional leverage headroom for Q3/Q4 2026; $100M EBITDA addback for Specified Addback Matter; noteholders received 0.25% amendment fee on principal
Risk Factors
- Elevated leverage may persist beyond the Specified Period if restructuring savings are delayed
- The $100M EBITDA addback for Specified Addback Matter could mask underlying operational weakness
- Increased interest step-up cap (2.00%) adds cost if leverage remains high
Investment Themes
Documents Analyzed
This report is based on 2 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000818479-26-000278 |
| Exhibit: ex43-fifthamendmenttonot.htm | 0000818479-26-000278 |
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Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 20, 2026 7d ago | Press Release | $9.08 | awaiting T+60 | — | $9.35 (+2.97%) |
Oct 9, 2026 18d ago | 8-K | $8.53 | awaiting T+60 | — | $9.35 (+9.61%) |
Sep 10, 2026 6w ago | Institutional Cluster | $10.50 | awaiting T+60 | — | $9.35 (−10.95%) |
Jun 16, 2026 19w ago | Insider Cluster | $10.03 $10.46 | ▲ +4.29% | ▲ +1.14% | $9.35 (−6.78%) |
Jun 15, 2026 19w ago | Insider Cluster | $10.45 $10.50 | ▲ +0.48% | ▼ −0.52% | $9.35 (−10.53%) |
Jun 11, 2026 19w ago | 8-K | $10.14 $11.38 | ▲ +12.23% | ▲ +7.83% | $9.35 (−7.79%) |
May 5, 2026 25w ago | 8-K | $11.14 $13.37 | ▼ −20.02% | ▼ −17.96% | $9.35 (+16.07%) |
May 5, 2026 25w ago | Press Release | $11.14 $13.37 | ▲ +20.02% | ▲ +17.96% | $9.35 (−16.07%) |
Apr 22, 2026 26w ago | Press Release | $11.90 $13.46 | ▲ +13.11% | ▲ +8.09% | $9.35 (−21.43%) |
Mar 9, 2026 33w ago | Press Release | $12.80 $9.83 | ▼ −23.20% | ▼ −35.19% | $9.35 (−26.95%) |
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