KLDiscovery announced that certain of its subsidiaries have entered into a new secured credit agreement, dated February 8, 2021 (the “New Credit Agreement”), with Wilmington Trust, National Association and certain lenders which increases KLDiscovery’s loan capacity, lowers annual debt payments from $17 million to $3 million and terminates all lending commitments under its prior First Lien Credit Agreement, dated December 9, 2016, with Royal Bank of Canada (the “Prior Credit Agreement”).

The New Credit Agreement provides for (i) initial term loans in an aggregate principal amount of $300 million (the “Initial Term Loans”), (ii) delayed draw term loans in an aggregate principal amount of $50 million (the “Delayed Draw Term Loans”) and (iii) revolving credit loans in an aggregate principal amount of $40 million (the “Revolving Credit Loans”). The Revolving Credit Loans represent an increase of $10 million over the prior revolving credit loans they replace.

The Initial Term Loans and Delayed Draw Term Loans will bear interest at the Adjusted Eurocurrency Rate plus 6.50% per annum, or with respect to Base Rate Loans, the Base Rate plus 5.50% per annum. The Revolving Credit Loans will bear interest at the Adjusted Eurocurrency Rate plus 4.00% per annum, or with respect to Base Rate Loans, the Base Rate plus 3.00% per annum. Rates are at the discretion of the Loan Parties. The Initial Term Loans and Delayed Draw Term Loans amortize at a rate of 1.00% of the aggregate principal amount of Initial Term Loans and Delayed Draw Term Loans outstanding, payable quarterly. This amortization rate is a significant improvement from the Prior Credit Agreement, decreasing from 5.00% in the Prior Credit Agreement to 1.00% pursuant to the New Credit Agreement.

The Revolving Credit Loans, Initial Term Loans and Delayed Draw Term Loans are each scheduled to mature on the earlier of February 8, 2026 and six months prior to maturity of KLDiscovery’s convertible debentures due 2024.

“We are pleased we are able to refinance our former debt with more favorable terms and financial covenants as we continue to strengthen KLDiscovery for the long-term,” said Christopher Weiler, Chief Executive Officer of KLDiscovery. “Lowering our annual debt payments significantly improves our annual cash flow.”