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Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt

Note 6. Debt

The fair value of the Company’s debt obligation approximated its book value as of June 30, 2025 and December 31, 2024 and consisted of the following (in thousands):

 

 

June 30, 2025

 

 

December 31, 2024

 

Amended First Lien Credit Facility

 

$

2,164,538

 

 

$

2,185,000

 

Less: Current portion of long-term debt

 

 

(21,850

)

 

 

(21,850

)

Total long-term debt

 

$

2,142,688

 

 

$

2,163,150

 

Less: Deferred financing costs

 

 

(38,403

)

 

 

(41,861

)

   Long-term debt, net

 

$

2,104,285

 

 

$

2,121,289

 

First Advantage Holdings, LLC, an indirect wholly-owned subsidiary of the Company, is a party to a First Lien Credit Agreement (as amended, “2024 First Lien Credit Agreement”), which provides for a term loan of $2.185 billion due October 31, 2031, carrying an interest rate of 3.00% to 3.25%, based on the first lien ratio, plus the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (“SOFR”) and an applicable margin (“Amended First Lien Credit Facility”), and a $250.0 million revolving credit facility due October 31, 2029 (“Amended Revolver”). The effective interest rate on the Amended First Lien Credit Facility, which is calculated as the contractual interest rates adjusted for the debt issuance costs is 8.20%.

The Amended First Lien Credit Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount. The Amended Revolver has no amortization.

The 2024 First Lien Credit Agreement is collateralized by substantially all assets and capital stock owned by direct and indirect domestic subsidiaries and is governed by certain restrictive covenants including limitations on indebtedness, liens, and other corporate actions such as investments and acquisitions. In the event the Company’s outstanding indebtedness under the Amended Revolver exceeds 40.0% of the aggregate principal amount of the revolving commitments then in effect, it is required to maintain a consolidated first lien leverage ratio no greater than 7.75 to 1.00. As of June 30, 2025, there were no outstanding borrowings under the Amended Revolver and $2,164.5 million outstanding under the Amended First Lien Credit Facility. In addition, $0.7 million in letters of credit were issued under the 2024 First Lien Credit Agreement to support two office leases. As the Company had no outstanding amounts under the Amended Revolver, it was not subject to the consolidated first lien leverage ratio covenant. The Company was compliant with all covenants under the agreement as of June 30, 2025.

In May 2025, the Company made a voluntary principal repayment of $15.0 million on its outstanding Amended First Lien Credit Facility. As a result of this prepayment, the Company recorded a total loss on extinguishment of debt of $0.3 million, stemming from the write-off of unamortized deferred financing costs. No prepayment penalties were incurred.