REZI RESIDEO TECHNOLOGIES, INC.

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Executive Summary

Resideo Technologies entered into a Second Amendment and Restatement Agreement on June 4, 2026, to restructure its existing credit facilities primarily to facilitate the planned spin-off of its ADI Global Distribution segment (expected around August 3, 2026). The amendment restated $2.327 billion in existing term loans and a new $500 million revolving credit facility (undrawn at closing), while creating new covenant baskets and a temporary leverage holiday to enable the separation. The ADI spin-off will generate a minimum $900 million distribution, which will be used to prepay term loans, significantly delevering the remaining products-and-solutions business.

Actionable Insight

Key Facts

• Second Amendment and Restatement Agreement executed on June 4, 2026, to amend and restate the existing credit agreement in its entirety.
• Total senior secured credit facilities of approximately $2,827 million: ~$518M Initial Term Loan, ~$590M Fourth Amendment Term Loan, ~$1,219M Sixth Amendment Term Loan, and a new $500M Revolving Credit Facility (undrawn).
• Revolving credit facility refinanced in full the prior $500M revolver; no new borrowings occurred on the effective date.
• Primary purpose: to permit and facilitate the ADI Spin-Off Transaction, the separation of the ADI Global Distribution business via a pro rata stock distribution expected on or around August 3, 2026.
• ADI Spin-Off Distribution of not less than $900 million from new ADI debt and notes will be used for a mandatory prepayment of Term Loans (ADI Spin-Off Prepayment).
• Financial covenants are loosened significantly post-spin: total leverage ratio caps rise to 4.75x for the first two quarters after the spin, stepping down to 4.00x thereafter; the interest coverage ratio floor was reduced to 2.50x from 2.75x.
• Multiple new 'ADI Spin-Off Negative Covenant Baskets' (debt, liens, investments, RPs, etc.) were added with a 4.00x pro forma leverage test to facilitate the separation.
• The ADI Spin-Off Entities will be released from guarantees and liens upon consummation of the spin.
• A Co-Borrower Merger (Resideo Funding Inc. merging into Resideo Funding II, LLC) is also contemplated.
• CEO succession: Thomas Surran appointed as President and CEO, effective upon completion of the ADI Spin-Off (expected mid-Q3 to mid-Q4 2026), succeeding Jay Geldmacher.

Financial Impact

The spin-off will result in a minimum $900 million prepayment of term loans, substantially reducing post-spin leverage. The $500 million Revolving Credit Facility was undrawn at closing, providing liquidity. Existing term facilities total approximately $2.327 billion.

Risk Factors

• ADI Spin-Off execution risk; any delay or failure would reinstate guarantees and liens.
• The remaining stub entity will have higher pro-forma leverage immediately post-spin, requiring successful operational execution to de-lever.
• CEO transition from Jay Geldmacher to Thomas Surran creates temporary management discontinuity.
• timeHorizon

Market Snapshot

Documents Analyzed

This report is based on 5 SEC documents filed with EDGAR.

US Market Status