XML 27 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

DEBT OBLIGATIONS | 6 Months Ended
--- | ---
Jun. 30, 2021
Debt Disclosure [Abstract] |
DEBT OBLIGATIONS | DEBT OBLIGATIONS Outstanding debt obligations as of June 30, 2021 and December 31, 2020 consisted of the following:
(in thousands) | June 30, 2021 |  | December 31, 2020
Credit and Guaranty Agreement: |  |  |
Term facility - Matures April 27, 2027 and bears interest at LIBOR (with a LIBOR "floor" of 1.00%) plus 5.75% at June 30, 2021 (actual rate of 6.75% at June 30, 2021) | $ | 300,000 |  |  | $ | — |
Revolving credit facility - $40.0 million line, matures April 27, 2026 and bears interest at LIBOR (with a LIBOR "floor" of 1.00%) plus 4.75% at June 30, 2021 (actual rate of 5.75% at June 30, 2021) | 30,000 |  |  | — |
Senior Credit Agreement: |  |  |
Term facility - Original maturity at January 3, 2023 and bore interest at LIBOR (with a LIBOR "floor" of 1.00% beginning March 18, 2020) plus 6.50% at December 31, 2020 (actual rate of 7.50% at December 31, 2020) | — |  |  | 279,417 |
Term Loan - Subordinated, original maturity at July 3, 2023 and bore interest at 5.00% plus an applicable margin (actual rate of 12.50% at December 31, 2020) | — |  |  | 102,623 |
Total debt obligations | 330,000 |  |  | 382,040 |
Less: current portion of long-term debt | (3,000) |  |  | (19,442) |
Less: unamortized debt discounts and deferred financing costs | (8,813) |  |  | (4,725) |
Long-term debt, net | $ | 318,187 |  |  | $ | 357,873 |
Credit and Guaranty Agreement On April 27, 2021, Priority Holdings LLC ("Holdings"), which is a direct wholly-owned subsidiary of the Company, and certain direct and indirect subsidiaries of Holdings (together with Holdings, collectively, the "Loan Parties"), entered into a Credit and Guaranty Agreement (the "Credit Agreement") with Truist Bank ("Truist") and the lenders party thereto, pursuant to which Holdings has access to senior credit facilities in an aggregate principal amount of $630.0 million which are secured by substantially all of the assets of the Loan Parties and by the equity interests of Holdings. The credit facilities under the Credit Agreement are comprised of (i) a senior secured first lien term loan facility in an aggregate principal amount of $300.0 million (the "Initial Term Loan"), the proceeds of which were used to fund the refinancing described below, (ii) a senior secured revolving credit facility in an aggregate amount not to exceed $40.0 million outstanding at any time (the “Revolving Credit Facility”) and (iii) a senior secured first lien delayed draw term loan facility in an aggregate principal amount of $290.0 million (the “Delayed Draw Term Loan”), the proceeds of which may be used to fund the Company’s acquisition of Finxera. Until the Delayed Draw Term Loan is drawn, the Loan Parties will pay a fee on the undrawn amounts at a rate of 2.875% per annum from the 46 th day after the closing date of the Credit Agreement to the 90 th day after closing and 5.75% per annum thereafter for so long as the amounts remain committed and undrawn. Outstanding borrowings under the Credit Agreement accrue interest using either a base rate (as defined therein) or a LIBOR rate plus an applicable margin per annum, as provided in the Credit Agreement, which includes a LIBOR rate floor of 1.0% per annum. Accrued interest is payable on each interest payment date (as defined in the Credit Agreement). The revolving credit facility incurs an unused commitment fee on any undrawn amount of the $40.0 million credit line in an amount equal to 0.5% per annum of the unused portion. Under the terms of the Credit Agreement, the future applicable interest rate margins may vary based on the Loan Parties Total Net Leverage Ratio in addition to future changes in the underlying market rates for LIBOR and the rate used for base-rate borrowing. Holdings and certain other Loan Parties have previously entered into (i) the Senior Credit Agreement and (ii) the Term Loan Agreement, both of which are described below. The proceeds from the sale of the Securities (refer to Note 9, Redeemable Senior Preferred Stock and Warrants) and from the Initial Term Loan were used to refinance the Senior Credit Agreement and the Term Loan Agreement and all outstanding obligations thereunder were repaid in full (or in the case of outstanding undrawn letters of credit, deemed issued under the Credit Agreement), and all commitments and guaranties in connection therewith have been terminated or released (the "Refinancing"). Prepayments Under the Credit Agreement, prepayments of outstanding principal may be made in permitted increments with a 1.0% penalty for certain prepayments made in connection with repricing transactions. Such premium will be based on the principal amount that is prepaid, subject to the terms of the credit agreements. Acceleration The outstanding amount of any loans and any other amounts owing by the Borrowers under the Credit Agreement may, after the occurrence of an Event of Default (as defined in the Credit Agreement), at the option of Truist, be declared immediately due and payable. Events of Default include, without limitation, the failure of the Loan Parties to pay principal, premium or interest when due under the Credit Agreement, or the failure by the Loan Parties to perform or comply with any term or covenant in the Credit Agreement, in each case, subject to any applicable cure periods provided therein. Covenants The Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default, and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the Loan Parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates), and to enter into certain leases. If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the Loan Parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the Credit Agreement as the ratio of consolidated total debt of the Loan Parties to the Loan Parties Consolidated Adjusted EBITDA (as defined in the Credit Agreement). If applicable, the maximum permitted Total Net Leverage Ratio is (i) 6.50:1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022, (ii) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023, and (iii) 5.50:1.00 at each fiscal quarter ended September 30, 2023 and each fiscal quarter thereafter. Senior Credit Agreement Outstanding borrowings under that certain Credit and Guaranty Agreement, dated as of January 3, 2017 and subsequently amended, with Truist (the "Senior Credit Agreement"), accrued interest using either a base rate (as defined) or a LIBOR rate plus an applicable margin, or percentage per annum, as provided in the amended credit agreement. For the term loan facility of our Senior Credit Agreement, the Sixth Amendment, which was executed on March 18, 2020, thereto provided for a LIBOR "floor" of 1.0% per annum. Accrued interest was payable monthly. The revolving credit facility incurred a commitment fee on any undrawn amount of the $25.0 million credit line, which equated to 0.50% per annum for the unused portion. The outstanding obligations under the Senior Credit Agreement at the time of the Refinancing were $274.6 million. Term Loan Agreement Outstanding borrowings under that certain Credit and Guaranty Agreement, dated as of January 3, 2017 and subsequently amended, with Goldman Sachs Specialty Lending Group, L.P. (the "Term Loan Agreement") accrued interest at 5.0%, plus an applicable margin, or percentage per annum, as indicated in the amended credit agreement. Accrued interest was payable quarterly at 5.0% per annum, and the accrued interest attributable to the applicable margin was capitalized as payment-in-kind ("PIK") interest each quarter. The outstanding obligations under the Term Loan Agreement at the time of the Refinancing were $105.1 million, which consisted of the principal amount borrowed under the Term Loan Agreement of $80.0 million plus accumulated PIK interest of $25.1 million. Contractual Maturities Based on terms and conditions existing at June 30, 2021, future minimum principal payments for long-term debt are as follows:
(in thousands) |  | Principal Due
|  | Credit and Guaranty Agreement
Twelve-month period ending June 30, |  | Term Loan |  | Revolver |  |  |  | Total
2022 (current) |  | $ | 3,000 |  |  | $ | — |  |  |  |  | $ | 3,000 |
2023 |  | 3,000 |  |  | — |  |  |  |  | 3,000 |
2024 |  | 3,000 |  |  | — |  |  |  |  | 3,000 |
2025 |  | 3,000 |  |  | — |  |  |  |  | 3,000 |
2026 |  | 3,000 |  |  | 30,000 |  |  |  |  | 33,000 |
Beyond five years |  | 285,000 |  |  | — |  |  |  |  | 285,000 |
Total |  | $ | 300,000 |  |  | $ | 30,000 |  |  |  |  | $ | 330,000 |
Additionally, the Company may be obligated to make certain additional mandatory prepayments after the end of each year based on excess cash flow, as defined in the Credit Agreement. Interest Expense and Amortization of Deferred Loan Costs and Discounts Interest expense, including fees for undrawn amounts under the revolving credit facility and the delayed draw term loan facility, as well as amortization of deferred financing costs and debt discounts, was $7.3 million and $16.5 million for the three months and six months ended June 30, 2021, respectively, and $11.7 million and $22.0 million for the three months and six months ended June 30, 2020, respectively. Interest expense included amortization of deferred financing costs and debt discounts of $0.6 million and $1.2 million for the three months and six months ended June 30, 2021, respectively, and $0.7 million and $1.1 million for the three months and six months ended June 30, 2020, respectively. Deferred Loan Costs and Discounts, and Debt Extinguishment and Modification Expenses Refinancing: The Initial Term Loan under the Credit Agreement was issued at a discount of $6.4 million. Additionally, the Company incurred approximately $12.9 million of costs for the Refinancing, including $5.7 million of fees related to the Delayed Draw Term Loan that was not drawn at June 30, 2021. The fees related to the Delayed Draw Term Loan have been deferred and included in other non-current assets on the Company’s consolidated balance sheet at June 30, 2021.The Company determined that the issuance of the Initial Term Loan under the Refinancing was partially an extinguishment and a modification. Of the remaining $7.2 million of costs incurred for the Refinancing, the Company recorded approximately $1.9 million as deferred financing costs, which are presented, along with the discount of $6.4 million, as a deduction from the debt obligations on the Company’s consolidated balance sheet at June 30, 2021. Additionally, the Company recorded debt extinguishment and modification costs of $8.3 million during the three months and six months ended June 30, 2021, which consisted primarily of $5.3 million of lender and third-party fees incurred in connection with the Refinancing and a $3.0 million partial write-off of previously deferred fees and costs under the Senior Credit Agreement and the Term Loan Agreement. These costs are reported within other expenses, net on the Company’s consolidated statements of operations. Senior Credit Agreement: For the Sixth Amendment, executed in the first quarter of 2020, $2.7 million of lender fees were deferred and added to then-existing unamortized loan costs and discount. Approximately $0.4 million of such costs were expensed in connection with the Sixth Amendment during the first quarter of 2020

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration