Why a Nearly Debt-Free Contractor Wants $690 Million of Credit

MYR Group ended the second quarter with $9.4 million of money borrowed, against an EBITDA that runs above $300 million a year — a leverage ratio of about 0.03 times, which is to say no leverage at all. Then, in the first week of September, it arranged a credit package roughly disproportionate to that: the revolving facility going to $690 million from $490 million, plus a new $150 million term loan and a C$70 million term loan on top.

There is a fine financial tradition of zero-debt companies expanding their credit this way, and it is not because they have suddenly decided to be in debt. The reason has everything to do with what sort of financial machine a specialty electrical contractor actually is.

The revolver is float, not leverage

MYR builds and maintains the plumbing of the grid — transmission and distribution work for utilities, and commercial-industrial construction (the data-center, factory, and mission-critical stuff) — and it is growing at a speed that its numbers almost can't keep up with. Backlog hit a record $3.16 billion in June, up about 20% from a year earlier; second-quarter revenue was a record $1.08 billion, up 20%. Management guides to 13–15% organic growth for the year.

A contractor's scarce economic resource isn't the backlog, exactly. It's the cash to fund the backlog. Labor and materials get paid out as work proceeds, while the customer pays later, on the billing cycle. Grow the backlog and you grow the receivables and contract assets that soak up cash before they turn back into it. That is why MYR's free cash flow was negative $25.6 million in the first half of 2026 even as profit hit records — rising receivables and heavier capital spending ate the cash. The cash shows up when projects close out and billings clear.

That is what the revolver is for: float, not leverage. A contractor at this growth rate wants a big, cheap, committed line so it never has to slow its bidding of fixed-price work for want of liquidity. Growing the revolver from $490 million to $690 million is the company buying the right to keep running flat-out.

The term loans are for the deals

The truly interesting part isn't the revolver, which any rational growing contractor would want. It's the term loans. A revolver is a liquidity product — draw it, repay it, as short-term needs swing. Term money is different: committed, on a fixed schedule, chosen for a purpose rather than for daily float. And MYR just gave it one.

In July it closed $328 million of acquisitions — Valley Electric and Comet Electric, which broaden its commercial-industrial reach — funded with $235 million drawn on the old revolver plus cash. Management said the expanded capacity is there to support organic growth, pursue future acquisitions, and opportunistically buy back stock; one write-up framed the whole package, accurately enough, as "for debt and deals". The term loans are the machinery for the deals: locked-in acquisition money that doesn't have to live on a revolver draw it was never meant to hold.

The C$70 million piece is the funniest tell. There is no special reason a U.S.-focused contractor needs term debt denominated in Canadian dollars except that it wants to fund — or hedge — a non-U.S. leg of the business. Either way, it is money with a designated job, which is precisely the difference between a credit line and a loan.

What it actually means

So the structural point, the one that matters for reading MYR's balance sheet: it looks "debt-free" because the draw today is near zero, but the committed capacity — the revolver plus the term loans, roughly $850 million — is the real financing engine. This is the financial version of a loaded gun that hasn't been fired. A company that wants to double its operations doesn't gradually accrete debt; it buys a big facility in advance, because its most valuable tool when competing for large fixed-price work is the contracted, demonstrated ability to fund it.

That flexibility cuts both ways, and it's the honest read for an investor trying to decide what's already priced in. Low leverage right now is genuine financial strength — MYR has earned the right to borrow on good terms. But a facility this size is capacity to lever up fast, and the company's own CFO cautioned that the first year of the new acquisitions is roughly EPS-neutral because of backlog amortization, not an earnings kick. Whether the credit package turns out to be a growth engine or a slow-burn leverage story depends entirely on what it gets used for, and how carefully.

And it's worth remembering the price already embeds a lot of this optimism. MYR's stock roughly doubled over the past year before pulling back hard — it still trades far below its 52-week high even as the operating numbers set records. A bigger credit line, however well designed, doesn't change the underlying question: whether a contractor can keep converting a record backlog into margin faster than the working capital eats its cash. That, not the facility, is the machine.