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Debt
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt

Note 6. Debt

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

 

 

September 30, 2025

 

 

December 31, 2024

 

Amended First Lien Credit Facility

 

$

2,139,538

 

 

$

2,185,000

 

Less: Current portion of long-term debt

 

 

—

 

 

 

(21,850

)

Total long-term debt

 

$

2,139,538

 

 

$

2,163,150

 

Less: Deferred financing costs

 

 

(36,428

)

 

 

(41,861

)

   Long-term debt, net

 

$

2,103,110

 

 

$

2,121,289

 

First Advantage Holdings, LLC, an indirect wholly-owned subsidiary of the Company, is a party to a First Lien Credit Agreement, which provides for a term loan of $2.185 billion due October 31, 2031 and a $250.0 million revolving credit facility due October 31, 2029.

On July 30, 2025, the Company amended the First Lien Credit Agreement (“2025 Amended First Lien Credit Agreement”) to reduce the interest rate on its term loan to a range of 2.50% to 2.75%, 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 (“2025 Amended First Lien Credit Facility”). The amendment also reduced the interest rate on its revolving credit facility to a range of 2.25% to 2.75%, based on the first lien ratio, plus SOFR (“2025 Amended Revolver”). The effective interest rate on the 2025 Amended First Lien Credit Agreement, which is calculated as the contractual interest rates adjusted for the debt issuance costs was 7.37%.

The 2025 Amended First Lien Credit Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount. The 2025 Amended Revolver has no amortization. During the nine months ended September 30, 2025, the Company made voluntary principal prepayments totaling $40.0 million on its outstanding term loan. As a result of these prepayments, the Company recognized a loss on extinguishment of debt of $0.7 million, primarily related to the write-off of unamortized deferred financing costs. No prepayment penalties were incurred. In accordance with the terms of the 2025 Amended First Lien Credit Agreement, these voluntary prepayments reduced the remaining scheduled future principal repayment obligations on the term loan.

The 2025 Amended 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 2025 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 September 30, 2025, there were no outstanding borrowings under the 2025 Amended Revolver and $2,139.5 million outstanding under the 2025 Amended First Lien Credit Facility. In addition, $0.7 million in letters of credit were issued under the 2025 Amended First Lien Credit Agreement to support two office leases. As the Company had no outstanding amounts under the 2025 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 September 30, 2025.