XML 50 R28.htm IDEA: XBRL DOCUMENT v3.25.4
Debt
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
Debt as of December 31, 2025 and 2024 includes the following:
As of December 31, 2025As of December 31, 2024
Interest
Rate		Outstanding
Balance		Interest
Rate		Outstanding
Balance
Credit Facilities:
Revolver4.95%229,088 4.00%48,820 
U.S. Term Loan5.10%482,144 5.62%508,863 
EURO Term Loan3.13%148,477 4.00%138,767 
Industrial development bonds5.26%10,000 5.26%10,000 
Bank lines of credit and other debt obligationsVarious1,501 Various1,817 
Total debt$871,210 $708,267 
Less: debt issuance costs(652)(1,099)
Less: short-term and current portion of long-term debts(35,657)(37,554)
Total long-term debt$834,901 $669,614 
Credit facilities
During June 2022, the Company and its wholly owned subsidiary, Quaker Houghton B.V., as borrowers, Bank of America, N.A., as administrative agent, U.S. Dollar swing line lender and letter of credit issuer, Bank of America Europe Designated Active Company, as Euro Swing Line Lender, certain guarantors and other lenders entered into an amendment to its primary credit facility (the “Original Credit Facility”). The amended credit facility (“Credit Facility”) established (A) a new $150.0 million Euro equivalent senior secured term loan (the “Euro Term Loan”), (B) a new $600.0 million senior secured term loan (the “U.S. Term Loan”), and (C) a new $500.0 million senior secured revolving credit facility (the “Revolver”), each maturing in June 2027. The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed the greater of $300.0 million or 100% of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase.
The Company used the proceeds of the Credit Facility to repay all outstanding loans under the Original Credit Facility, unpaid accrued interest and fees on the closing date under the Original Credit Facility and certain expenses and fees. U.S. Dollar-denominated borrowings under the Credit Facility bear interest, at the Company’s election, at the base rate or term SOFR plus an applicable rate ranging from 1.00% to 1.75% for term SOFR loans and from 0.00% to 0.75% for base rate loans, depending upon the Company’s consolidated net leverage ratio. Loans based on term SOFR also include a spread adjustment equal to 0.10% per annum. Borrowings under the Credit Facility denominated in currencies other than U.S. Dollars bear interest at the alternative currency term rate plus the applicable rate ranging from 1.00% to 1.75%.
The Credit Facility contains affirmative and negative covenants, financial covenants and events of default, including without limitation restrictions on (a) the incurrence of additional indebtedness; (b) investments in and acquisitions of other businesses, lines of business and divisions; (c) the making of dividends or capital stock purchases; and (d) dispositions of assets. Dividends and share repurchases are permitted in annual amounts not exceeding the greater of $75 million annually and 25% of Consolidated EBITDA if there is no default. If the consolidated net leverage ratio is less than 2.50 to 1.00, then the Company is no longer subject to restricted payments.
Financial covenants contained in the Credit Facility include a consolidated interest coverage ratio test and a consolidated net leverage ratio test. The consolidated net leverage ratio at the end of a quarter may not be greater than 4.00 to 1.00, subject to a permitted increase during a four-quarter period after certain acquisitions. The Company has the option of replacing the consolidated net leverage ratio test with a consolidated senior net leverage ratio test if the Company issues certain types of unsecured notes, subject to certain limitations. Events of default in the Credit Facility include without limitation defaults for non-payment, breach of representations and warranties, non-performance of covenants, cross-defaults, insolvency, and a change of control in certain circumstances. The occurrence of an event of default under the Credit Facility could result in all loans and other obligations becoming immediately due and payable and the Credit Facility being terminated. As of December 31, 2025 and December 31, 2024, the Company was in compliance with all of the Credit Facility covenants.
The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the twelve months ended December 31, 2025 was approximately 5.2%. As of December 31, 2025, the interest rate on the outstanding borrowings under the Credit Facility was approximately 4.7%. As part of the Credit Facility, the Company is required to pay an annual commitment fee ranging from 0.150% to 0.275% related to unutilized commitments under the Revolver, depending on the Company’s consolidated net leverage ratio. The Company had unused capacity under the Revolver of approximately $268.5 million, which is net of bank letters of credit of approximately $2.5 million, as of December 31, 2025.
In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable rate borrowings into an average fixed rate obligation of 3.64% plus an applicable margin as provided in the Credit Facility based on the Company’s consolidated net leverage ratio. As of December 31, 2025, the aggregate interest rate on the swaps, including the fixed base rate plus the applicable margin, was 5.0%. See Note 24, Hedging Activities, for additional information.
The Company capitalized third-party and credit debt issuance costs attributed to the Euro Term Loan, U.S. Term Loan and Revolver during the second quarter of 2022. Capitalized costs attributed to the Euro Term Loan and U.S. Term Loan are recorded as a direct offset to Long-term debt on the Consolidated Balance Sheets. Capitalized costs attributed to the Revolver are recorded within Other assets on the Consolidated Balance Sheets. These capitalized costs are amortized into Interest expense over the five year term of the Credit Facility. As of December 31, 2025 and 2024, the Company had $0.7 million and $1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $1.4 million and $2.4 million, respectively, of debt issuance costs recorded within Other assets.
Industrial development bonds
As of December 31, 2025 and 2024, the Company had fixed rate, industrial development authority bonds totaling $10.0 million in principal amount due in 2028. These bonds have similar covenants to the Credit Facility noted above.
Bank lines of credit and other debt obligations
The Company has certain unsecured bank lines of credit and discounting facilities in certain foreign subsidiaries, which are not collateralized. The Company’s other debt obligations primarily consist of certain domestic and foreign low interest rate or interest-free municipality-related loans, local credit facilities of certain foreign subsidiaries and finance lease obligations. Total unused capacity under these arrangements as of December 31, 2025, was approximately $57.4 million.
In addition to the bank letters of credit described in the “Credit facilities” subsection above, the Company’s other off-balance sheet arrangements include certain financial and other guarantees. The Company’s total bank letters of credit and guarantees outstanding as of December 31, 2025 were approximately $7 million.
The Company incurred the following debt related expenses included within Interest expense in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023:
202520242023
Interest expense$42,634 $43,223 $53,582 
Amortization of debt issuance costs1,413 1,413 1,413 
Total$44,047 $44,636 $54,995 
Based on the variable interest rates associated with the Credit Facility, as of December 31, 2025 and 2024, the amounts at which the Company’s total debt were recorded are not materially different from their fair market value.
As of December 31, 2025, annual principal maturities on long-term borrowings, including the current portion, are as follows:
For the year ended December 31, 2026$35,172 
For the year ended December 31, 2027824,624 
For the year ended December 31, 202810,000 
For the year ended December 31, 2029— 
For the year ended December 31, 2030— 
Total maturities on debt in the next five fiscal years869,796