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Long-Term Debt
6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
2020 Credit Agreements
In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with its subsidiaries (the “New Borrowers”), entered into a credit agreement (the “New Credit Agreement”) to refinance existing $400.0 million long-term debt with a new $780.0 million facility. The New Credit Agreement provides for a First Lien Term Loan (the “New First Lien Term Loan”) of $600.0 million, maturing October 2027, and a Revolving Credit Facility (the New Revolving Credit Facility”) for up to $180.0 million in funding. The New Credit Agreement amended and restated the
Company’s prior credit agreement as of August 2018 (the “First and Second Lien Credit Agreements”). In November 2020, the Company repaid $50.0 million of principal balance of the New First Lien Term Loan using proceeds from the IPO. The New First Lien Term Loan bears interest at an annual rate equal to the Eurocurrency rate (i.e. the LIBOR rate) plus an applicable rate. The interest rate was 4.75% per annum as of June 30, 2021.
The New Credit Agreement also provides for a $20.0 million limit for letters of credit, which remained unused as of June 30, 2021 and December 31, 2020.
Borrowings under the New Credit Agreement are unconditionally guaranteed by Topco LLC, together with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions), as specified in the respective guaranty agreements. Borrowings under the New Credit Agreement are also secured by a first-priority lien and security interest in substantially all of the assets (subject to certain exceptions) of existing and future material domestic subsidiaries of Topco LLC that are loan parties.
The New Credit Agreement contains certain covenants, including, among other things, covenants limiting our ability to incur or prepay certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments and make changes in the nature of the business. Additionally, the New Credit Agreement also requires us to maintain a certain net leverage ratio. The Company was in compliance with these covenants as of June 30, 2021.
In June 2021, the Company engaged in substantive negotiations with a third party to sell Vector, and subsequently entered into a binding definitive agreement with respect to such sale on August 5, 2021 (see Notes 3 and 12). In conjunction with the sale, the Company will transfer the portion of the New Term Loan held by Vector to Intermediate in its entirety. Total outstanding debt is expected to remain unchanged after the sale.
Interest Rate Cap
In the first fiscal quarter of 2021, the Company entered into a new interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt. The contract, effective March 31, 2021, entitles the Company to receive from the counterparty at each calendar quarter end the amount, if any, by which a specified defined floating market rate exceeds the cap strike interest rate, applied to the contracts notional amount of $415.0 million The floating rate of interest is reset at the end of each three month period. The contract expires on March 31, 2023. The interest rate cap agreement has not been designated as a hedging relationship and has been recognized on the condensed consolidated balance sheet at fair value of $0.2 million within non-current assets with changes in fair value recognized in the condensed consolidated statements of income.
The Company’s long-term debt consisted of the following as of the periods presented (in thousands):
June 30, 2021December 31, 2020
New First Lien Term Loan$547,000 $550,000 
Unamortized debt issuance costs(14,417)(15,386)
Total long-term debt532,583 534,614 
Less: current portion(6,000)(6,000)
Total long-term debt, less current portion$526,583 $528,614 
There were no balances outstanding on the Company’s New Revolving Credit Facility as of June 30, 2021 and December 31, 2020.
As of June 30, 2021, the aggregate future principal maturities of the Company’s debt obligations for each of the next five years, based on contractual due dates, were as follows (in thousands):
2021 (remaining six months)
$3,000 
20226,000 
20236,000 
20246,000 
20256,000 
Thereafter520,000 
Total long-term debt$547,000