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Debt Obligations | 6 Months Ended
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Jun. 30, 2021
Debt Disclosure [Abstract] |
Debt Obligations | Debt Obligations The following table sets forth the Company's outstanding debt obligations as of June 30, 2021 and December 31, 2020 (in thousands):
| Maturity |  | Interest |  | Rate |  | June 30, 2021 |  | December 31, 2020
New Term Loan, net (1) | March 1, 2026 |  | LIBOR + |  | 8.5 | % |  | $ | 589,886 |  |  | $ | — |
Senior Term Loan, net (2) | December 31, 2023 |  | LIBOR + |  | 9.0 | % |  | — |  |  | 449,165 |
ABL Facility (Fifth Amendment) | March 1, 2026 |  | 3-month LIBOR + |  | 3.0 | % |  | 58,022 |  |  | — |
ABL Facility (Fourth Amendment)(3) | September 30, 2023 |  | 3-month LIBOR + |  | 4.0 | % |  | — |  |  | 79,238 |
Total debt obligations |  |  |  |  |  |  | $ | 647,908 |  |  | $ | 528,403 |
Less: Current portion of New Term Loan |  |  |  |  |  |  | 70,000 |  |  | — |
Total debt obligations, long-term |  |  |  |  |  |  | $ | 577,908 |  |  | $ | 528,403 |
(1) Net of original issue discount costs of $19.6 million and debt issuance costs of $2.5 million, as of June 30, 2021. (2) Net of debt issuance costs of $0.4 million, as of December 31, 2020. (3) The Fourth Amendment to the ABL Facility was replaced by the Fifth Amendment to the ABL Facility on March 1, 2021. Term Loan On March 1, 2021, the Company entered into a new term loan credit agreement (the “New Term Loan”). The proceeds of the New Term Loan were used to finance the Sensis Acquisition, refinance in full the Company's existing term loan facility (the “Senior Term Loan”), and pay fees and expenses related to the Sensis Acquisition and related financing. The New Term Loan established a senior secured term loan facility (the “Term Loan Facility”) in an aggregate principal amount equal to $700.0 million, of which 38.4% was held by related parties who are equity holders of the Company, including GoldenTree Asset Management LP, Paulson & Co. Inc., and Mudrick Capital Management, LP, who held 25.0%, 7.1%, and 6.3% of the debt, respectively, as of March 1, 2021. The Term Loan Facility matures on March 1, 2026 and borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The Term Loan Facility requires mandatory amortization payments equal to $17.5 million per fiscal quarter commencing June 30, 2021. The net proceeds from the New Term Loan of $674.9 million (net of original issue discount costs of $21.0 million and third-party fees of $4.1 million) were used to repay the remaining $449.6 million outstanding principal balance of the Senior Term Loan, accrued interest of $0.4 million, and third-party fees of $0.1 million. The Company accounted for this transaction with existing lenders as a modification. The transaction with other lenders party to only the Senior Term Loan was accounted for as an extinguishment. Accordingly, total third-party fees paid were $4.2 million, of which $1.7 million was immediately charged to General and administrative expense on the Company's condensed consolidated statement of operations. The remaining third-party fees of $2.5 million were deferred as debt issuance costs and will be amortized to interest expense, over the term of the loan, using the effective interest method. Additionally, there was unamortized debt issuance costs of $0.4 million on the existing Senior Term Loan, of which $0.3 million was written off and recorded as a loss on early extinguishment of debt on the Company's condensed consolidated statement of operations. The remaining unamortized debt issuance costs of $0.1 million will be deferred as debt issuance costs and amortized to interest expense, over the term of the New Term Loan, using the effective interest method. The New Term Loan, which was incurred by Thryv, Inc., the Company’s operating subsidiary, is secured by all the assets of Thryv, Inc., certain of its subsidiaries and the Company, and is guaranteed by the Company and certain of its subsidiaries. In accordance with the New Term Loan and the Senior Term Loan, the Company recorded interest expense with related parties for the three months ended June 30, 2021 and 2020 of $4.7 million and $4.6 million, respectively, and for the six months ended June 30, 2021 and 2020 of $8.7 million and $9.7 million, respectively. The Company has recorded accrued interest of $3.4 million and $8.5 million, as of June 30, 2021 and December 31, 2020, respectively. Accrued interest is included in Other current liabilities on the Company's condensed consolidated balance sheets. As of June 30, 2021, 29.6% of the New Term Loan was held by related parties who are equity holders of the Company, including GoldenTree Asset Management LP, Paulson & Co. Inc., and Mudrick Capital Management, LP, who held 17.9%, 7.6%, and 4.1% of the debt, respectively. Term Loan Covenants The New Term Loan contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness, liens, investments, loans, advances, guarantees, acquisitions, sales of assets, sale-leaseback transactions, swap agreements, payments of dividends or distributions, payments in respect of certain indebtedness, certain affiliate transactions, restrictive amendments to agreements, changes in business, amendments of certain material documents, capital expenditures, mergers, consolidations and liquidations, and use of the proceeds. Additionally, the Company is required to maintain compliance with a Total Net Leverage Ratio, calculated as Net Debt to Consolidated EBITDA, which shall not be greater than 3.0 to 1.0 as of the last day of each fiscal quarter (commencing with the fiscal quarter ended June 30, 2021). As of June 30, 2021, the Company was in compliance with its New Term Loan covenants. The Company also expects to be in compliance with these covenants for the next twelve months. ABL Facility On March 1, 2021, the Company entered into an agreement to amend (the “ABL Amendment”) the June 30, 2017 ABL Facility (the “ABL Facility”). The ABL Amendment was entered into in order to permit the term loan refinancing, the Sensis Acquisition and make certain other changes to the ABL credit agreement, including, among others: •revise the maximum revolver amount to $175.0 million; •reduce the interest rate per annum to (i) 3-month LIBOR plus 3.00% for LIBOR loans and (ii) base rate plus 2.00% for base rate loans; •reduce the commitment fee on undrawn amounts under the ABL Facility to 0.375%; •extend the maturity date of the ABL Facility to the earlier of March 1, 2026 and 91 days prior to the stated maturity date of the Term Loan Facility; •add the Australian subsidiaries acquired pursuant to the Sensis Acquisition as borrowers and guarantors, and establish an Australian borrowing base; and •make certain other conforming changes consistent with the Term Loan Agreement. The Company accounted for this transaction as a modification of the ABL Facility. Accordingly, the existing unamortized debt issuance costs of $2.4 million, as well as additional third-party fees and lender fees of $0.9 million associated with the latest ABL Amendment, will be deferred and will be amortized over the new term of the ABL Facility. As of June 30, 2021 and December 31, 2020, the Company had debt issuance costs with a remaining balance of $3.1 million and $2.5 million, respectively. These debt issuance costs are included in Other assets on the Company's condensed consolidated balance sheets. As of June 30, 2021, the Company had borrowing capacity of $77.7 million under the ABL Facility. ABL Facility Covenants The ABL Facility contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness liens, investments, loans, advances, guarantees, acquisitions, disposals of assets, payments of certain indebtedness, certain affiliate transactions, changes in fiscal year or accounting methods, issuance or sale of equity instruments, mergers, liquidations and consolidations, use of proceeds, maintenance of certain deposit accounts, compliance with certain ERISA requirements and compliance with certain Australian tax requirements. The Company is required to maintain compliance with a fixed charge coverage ratio that must exceed a ratio of 1.00. The fixed charge coverage ratio is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA as defined in the ABL credit agreement for such period minus capital expenditures incurred during such period, to (b) fixed charges. Fixed charges is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) consolidated interest expense accrued (other than amortization of debt issuance costs, and other non-cash interest expense) during such period, (b) scheduled principal payments in respect of indebtedness paid during such period, (c) all federal, state, and local income taxes accrued during such period, (d) all management, consulting, monitoring, and advisory fees paid to certain individuals or their affiliates during such period, and (e) all restricted payments paid during such period (whether in cash or other property, other than common equity interest). The Company is also required to maintain excess availability of at least $14.0 million, and U.S. excess availability of $10.0 million, in each case, at all times. As of June 30, 2021, the Company was in compliance with its ABL Facility covenants. The Company also expects to be in compliance with these covenants for the next twelve months. Leaseback Obligations As part of the YP Acquisition on June 30, 2017, the Company assumed certain obligations including a failed sale-leaseback liability associated with land and a building in Tucker, Georgia. In conjunction with this financing liability, the fair value of the land and building was included as a part of the total tangible assets acquired in the acquisition. A certain amount of this liability consists of a non-cash residual value at termination of the lease, which on this date will be written off against the remaining carrying value of the land and building, with any amount remaining recorded as a gain on termination of the lease contract. In June 2021, the Company made a $10.2 million cash payment to terminate the lease, which is recorded in Other in Cash flows from financing activities on the Company's condensed consolidated statement of cash flows. As of June 30, 2021, the lease termination resulted in the write-off of $48.1 million in net carrying value of assets under leaseback obligation and $55.2 million in leaseback obligations. During the three and six months ended June 30, 2021, a $3.1 million l oss on the termination of leaseback obligations was recorded in Other expense on the Company's condensed consolidated statements of operations. The following table sets forth the components of the Company's total leaseback obligations as of June 30, 2021 and December 31, 2020 (in thousands):
| June 30, 2021 |  | December 31, 2020
Non-cash residual value of Tucker, Georgia lease | $ | — |  |  | $ | 54,676 |
Future maturities associated with the Tucker, Georgia failed sale-leaseback liability | — |  |  | 862 |
Total leaseback obligations | $ | — |  |  | $ | 55,538 |

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- 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 + Details
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