The company that builds the fare gates for your subway ride and runs a defense business is having quiet conversations with some of its lenders about getting fresh cash. This comes just one year after a bigger debt restructuring that involved its private-equity owners, Elliott Investment Management and Veritas Capital. Back in July of last year, those two firms put $170 million of new equity into Cubic to help stabilize it.
The company now carries $2.1 billion in total debt, according to Bloomberg data. Some of Cubic's loans are trading at roughly 10 cents on the dollar.
That $170 million injection in July 2025 was intended to provide a financial cushion, but persistent operational difficulties have consumed that buffer faster than expected. The company's $2.1 billion debt load includes various term loans and bonds, and the most junior tranches have sunk to deeply distressed levels, reflecting market doubts about Cubic's ability to avoid a restructuring or bankruptcy.
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To provide context, Cubic's financial difficulties stem from a mix of operational hurdles. Its public transit and defense divisions have faced supply-chain bottlenecks, postponed contract awards, and costs tied to internal restructuring. These issues have squeezed cash flows, making additional funding necessary even after the July equity injection from its private-equity owners.
The depressed trading price of its loans reflects market skepticism about the company's ability to meet its obligations in the near term. The company's transit unit has struggled with chip shortages that delayed installations of fare-collection systems, while the defense side dealt with shifting Pentagon priorities, further pressuring liquidity.
Cubic has been trying to hold onto whatever cash it has. Early in 2026, the company told its lenders it would delay an interest payment on some of its debt.
The transit division, which produces fare-collection equipment for subways and buses, has faced chip shortages and installation delays, while the defense unit has wrestled with shifting Pentagon priorities. These headwinds have eroded cash reserves, forcing the company to seek further lender support.
Both S&P Global Ratings and Fitch Ratings have pointed to problems. S&P warned of an "onerous" debt load and weak performance stemming from supply-chain difficulties, postponed contract awards, and restructuring expenses. Fitch noted that the postponed interest payment underscores Cubic's liquidity problems.
Credit-rating agencies have flagged the company's heavy debt load and operational challenges, including supply-chain delays and postponed contracts. Without additional funding, Cubic may struggle to meet its near-term obligations, increasing the risk of a default within the next year.
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