Loan Facilities

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Loan Facilities

Note 9 — Loan Facilities

In April 2019, the Company borrowed as part of a refinancing of existing debt $375.0 million from a new five-year secured term loan facility (“Term Loan Facility”). The carrying value of the Term Loan Facility is recorded net of unamortized debt issuance costs and discount. The debt principal balance, including debt issuance costs and discount, approximates fair value. Since the borrowing is not accounted for at fair value, the fair value is not included in the Company’s fair value hierarchy in “Note 7 — Fair Value of Financial Instruments,” however, had the borrowing been included, it would have been classified in Level 2.

	As of December 31,
	2021		2020
	(in thousands)
Term Loan Facility carrying value	$	267,840	$	321,046
Unamortized discount	1,252		1,809
Unamortized debt issuance costs	2,783		4,020
Total long-term debt	$	271,875	$	326,875

Borrowings under the Term Loan Facility bear interest at either the U.S. Prime Rate plus 2.25% or LIBOR plus 3.25%, which represents a 50 basis point reduction from borrowing rates prior to refinancing. Borrowings under the Term Loan Facility had a weighted average interest rate for the years ended December 31, 2021 and 2020 of 3.4% and 3.8%, respectively (with the borrowing rate ranging from 3.3% to 3.4% and from 3.4% to 5.0%, respectively).

The Term Loan Facility requires quarterly principal amortization payments of $4.7 million from September 30, 2019 through March 31, 2024 with the remaining outstanding balance due at maturity on April 12, 2024. Effective April 14, 2020, all voluntary prepayments, including refinancing of all or part of the borrowings, under the Term Loan Facility were permitted to be made without penalty.

During the years ended December 31, 2021 and 2020, the Company made voluntary advance principal payments on the Term Loan Facility that were applied to future required quarterly installments. As of December 31, 2021, the Company has repaid in advance all required quarterly amortization payments due over the term of the Term Loan Facility and the remaining outstanding principal balance of $271.9 million is due at maturity. Under the terms of the credit agreement, the Company may also be required to repay certain amounts in advance of maturity in connection with an annual excess cash flow calculation, the non-ordinary course sale of assets, receipt of insurance proceeds, and the issuance of debt obligations, subject to certain exceptions. During the years ended December 31, 2021 and 2020, the Company made principal payments on the Term Loan Facility of $55.0 million and $38.8 million, respectively.

In April 2019. with borrowing from the Term Loan Facility, the Company repaid the outstanding principal balance of existing debt of $319.4 million and used proceeds of $375.0 million to pay fees and expenses and increased the Company's cash balance by $48.2 million. During the year ended December 31, 2019, the Company made mandatory principal payments on debt existing at that time of $8.8 million and on the Term Loan Facility of $9.4 million, or $18.1 million in total. All mandatory repayments of the Term Loan Facility are applied without penalty or premium.

The Term Loan Facility is guaranteed by the Company’s existing and subsequently acquired or organized wholly-owned U.S. restricted subsidiaries (excluding any registered broker-dealers) and secured with a first priority perfected security interest in certain domestic assets, 100% of the capital stock of each U.S. subsidiary and 65% of the capital stock of each non-U.S. subsidiary, subject to certain exclusions. The credit facility contains certain covenants that limit the Company’s ability above certain permitted amounts to incur additional indebtedness, make certain acquisitions, pay dividends and repurchase shares. The Term Loan Facility does not have financial covenants but is subject to certain other non-financial covenants. At December 31, 2021 and 2020, the Company was compliant with all loan covenants.

In conjunction with the refinancing in April 2019, the Company incurred fees of $5.7 million, of which $2.7 million was recorded as deferred financing costs and $3.0 million was expensed. In addition, as a result of the refinancing, $1.8 million of previously deferred fees, or fees in aggregate of $4.8 million, were charged to expense and recorded as interest expense in the consolidated statements of operations. The deferred financing costs incurred in connection with the refinancing, along with the remaining unamortized costs from the existing debt facility which, as of the date of the refinancing, were $9.0 million, are being amortized into interest expense over the remaining life of the obligation and recorded as a reduction in the carrying value of the Term Loan Facility in the consolidated statement of financial condition. For both years ended December 31, 2021 and 2020, the Company incurred incremental interest expense of $1.8 million, related to the amortization of these costs.