Aspen Aerogels entered into an amendment to its Credit, Security and Guaranty Agreement with MidCap Financial on December 16 2025, which was publicly disclosed on December 17 2025. The amendment expands the company’s financial flexibility by updating the covenant framework and adding technical provisions that streamline compliance and reduce the risk of covenant breaches.
Key changes to the covenant structure include the removal of the minimum EBITDA covenant and an increase in the minimum liquidity threshold to the greater of $50 million or 100 % of the outstanding term loan. These adjustments give Aspen more operational leeway, allowing it to maintain liquidity without triggering covenant violations even if short‑term earnings dip below previous limits.
The amendment is strategically timed to support Aspen’s 2026 plan, which focuses on shifting production to external manufacturing sites in China and Mexico and exploring adjacent markets such as battery energy‑storage systems. By strengthening its liquidity position, the company can fund the ramp‑up of external capacity and pursue new market opportunities without relying on additional debt or equity issuances.
Financially, the amendment improves Aspen’s liquidity outlook, which CFO Grant Thoele described as “trending ahead of expectations” thanks to operational efficiencies and working‑capital improvements. The company’s debt‑to‑capital ratio, previously at 0.37, is expected to remain moderate, and the enhanced covenant flexibility should help maintain that balance while supporting growth initiatives.
In the broader context, Aspen has faced headwinds in the U.S. electric‑vehicle market, with reduced thermal‑barrier demand from major OEMs. However, its Energy Industrial segment—home to Cryogel® and Pyrogel®—continues to grow, and the company’s Q3 2025 results showed revenue of $73 million, slightly above forecasts, while EPS fell to a loss of $0.08. The credit facility amendment positions Aspen to weather these market swings, invest in new product lines, and keep its balance sheet resilient as it navigates a shifting automotive landscape.
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