Long-term Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term Debt |
16. Long-term Debt:
The summary of long-term debt is as follows:
Term Loan Facility
On June 9, 2021, PQ Corporation (“PQ Corp”) and Ecovyst Catalyst Technologies LLC (“Ecovyst LLC” and, effective August 1, 2021, the “Borrower”), an indirect, wholly owned subsidiary of the Company, entered into an agreement for a senior secured term loan facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $900,000 with an original issue discount of 0.25% and interest at a floating rate of LIBOR (with a 0.50% minimum LIBOR floor) plus 2.75% per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50%), with a maturity date of June 9, 2028. The 2021 Term Loan Facility required scheduled quarterly amortization payments, each equal to 0.25% of the original principal amount of the loans under the 2021 Term Loan Facility.
On February 9, 2023, the Company amended the 2021 Term Loan Facility to replace LIBOR with a Secured Overnight Financing Rate (“SOFR”) as the benchmark interest rate. Following this amendment, the 2021 Term Loan Facility bore interest at an adjusted SOFR rate (with a 0.50% minimum floor) plus 2.75% per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50%).
On June 12, 2024, the Company amended the 2021 Term Loan Facility to, among other things, (a) reduce the interest rate applicable to all outstanding SOFR term loans to term SOFR plus 2.25% per annum from a maximum of adjusted term SOFR plus 2.75% per annum, (b) reduce the interest rate applicable to all outstanding base rate term loans to the alternate base rate plus 1.25% per annum from a maximum of the alternate base rate plus 1.75% per annum and (c) extend the maturity date of all outstanding term loans to June 12, 2031. As a result of the amendment, there is no longer a credit spread adjustment of 10 basis points.
On January 30, 2025, the Company amended the 2021 Term Loan Facility to, among other things, (a) reduce the interest rate applicable to all outstanding SOFR term loans to term SOFR plus 2.00% per annum from a maximum of term SOFR plus 2.25% per annum and (b) reduce the interest rate applicable to all outstanding base rate term loans to the alternate base rate plus 1.00% per annum from a maximum of the alternate base rate plus 1.25% per annum (the amended term loans, the “2025 Term Loan Facility”).
The interest rate on the 2025 Term Loan Facility was 5.65% as of December 31, 2025.
The 2025 Term Loan Facility is guaranteed by Ecovyst Catalyst Technologies LLC and Ecoservices Operations Corp, as well as other material U.S. subsidiaries of the Company. The obligations under the 2025 Term Facility are secured (i) by a first-priority security interest in, among other things, a pledge of substantially all of the Borrower’s and the guarantors’ assets (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral of the Borrower and the U.S. subsidiary guarantors securing the ABL Facility.
The Company may at any time voluntarily prepay loans under the 2025 Term Loan Facility in whole or in part without premium or penalty. As a result of the Advanced Materials & Catalysts Sale, the Company was required to make a mandatory partial repayment of its 2025 Term Loan Facility in the amount of $161,500. On December 31, 2025, utilizing proceeds from the Advanced Materials & Catalysts Sale, the Company completed this mandatory repayment and also made a voluntary prepayment of $303,500 on its 2025 Term Loan Facility, for a total repayment of $465,000. As a result of the prepayment, the Company is no longer required to make quarterly amortization payments on the 2025 Term Loan Facility.
Debt modification and extinguishment costs
The Company evaluated the terms of the amendments in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendments were a modification of debt.
As a result of the mandatory repayment and voluntary prepayment, the Company wrote off $1,228 of unamortized deferred financing costs and $3,350 of original issue discount, which are included in debt modification and extinguishment costs in the consolidated statements of (loss) income during the year ended December 31, 2025.
As a result of the January 2025 amendment, the Company recorded $960 of third-party financing costs, which is included in debt modification and extinguishment costs in the consolidated statements of (loss) income for the year ended December 31, 2025. No original issue discount was paid for the year ended December 31, 2025.
As a result of the June 2024 amendment, the Company recorded $4,471 of third-party financing costs as debt modification and extinguishment costs in the consolidated statements of (loss) income for the year ended December 31, 2024 and capitalized $2,183 of original issued discount within long-term debt, excluding current portion on the consolidated balance sheets. In addition, as a result of the June 2024 amendment, $90 of previous unamortized deferred financing costs and original issue discount associated with the previously outstanding debt were written off as debt modification and extinguishment costs for the year ended December 31, 2024
ABL Facility
On May 4, 2016, PQ Corp entered into a $200,000 senior secured asset-based revolving credit facility (the “ABL Facility”), which provided for $200,000 revolving credit commitments.
On March 20, 2020, PQ Corp amended its existing ABL Facility to increase the aggregate amount of the revolving loan commitments available by $50,000 to $250,000, consisting of up to $195,000 in U.S. commitments, up to $15,000 in Canadian commitments and up to $40,000 in European commitments. The maturity of the facility was extended to
March 20, 2025. In addition, there was an annual commitment fee equal to 0.375%, with a step-down to 0.25% based on average usage of the revolving credit borrowings available
Following the amendment, the borrowings under the amended ABL Facility bear interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25% to 1.75% or 0.25% to 0.75%, respectively.
On June 9, 2021, PQ Corp and Ecovyst LLC entered into a third amendment agreement (the “ABL Amendment”), which amended its ABL Credit Agreement, dated as of May 4, 2016 (the “ABL Credit Agreement” and, as amended by the ABL Amendment, the “Amended ABL Credit Agreement”). The ABL Amendment, among other things, decreased the aggregate amount of revolving loan commitments available to the borrowers thereunder by an aggregate amount of $150,000 to $100,000, consisting of $90,000 in U.S. commitments and $10,000 in European commitments and extended the maturity date with respect to borrowings under the Amended ABL Credit Agreement to August 2, 2026.
On February 17, 2023, the Company amended the ABL Facility to replace LIBOR with SOFR as the benchmark interest rate. Following this amendment, the borrowings under the ABL Facility bears interest at a rate equal to an adjusted term SOFR, which includes a credit spread adjustment of 10 basis points or the base rate plus a margin of between 1.25% to 1.75% or 0.25% to 0.75%, respectively. The interest rate on the ABL Facility was 7.00% as of December 31, 2025.
On April 10, 2025, the Company amended its ABL credit agreement to, among other things, (a) reallocate all European revolving loan commitments thereunder as United States revolving loan commitments, (b) extend the maturity date with respect to borrowings under the ABL Credit Agreement by over three years to April 10, 2030 (subject to acceleration under certain circumstances), (c) reduce the interest rate applicable to outstanding revolving loans that bear interest at a rate equal to Term SOFR by removing the credit spread adjustment that was applied to Term SOFR in the ABL Credit Agreement in calculating adjusted Term SOFR, and (d) reduce the frequency of borrowing base reporting, field examinations and appraisals (subject to higher frequency under certain circumstances). As a result of the amendment, the Company capitalized $551 of deferred financing costs within long-term debt, excluding current portion in the condensed consolidated balance sheets during the year ended December 31, 2025.
As of December 31, 2025, there were no revolving credit borrowings outstanding under the ABL Facility. Revolving credit borrowings are payable at the option of the Borrower throughout the term of the ABL Facility with the balance due August 2, 2026. The Company has the ability to request letters of credit under the ABL Facility. The Company had $3,230 of letters of credit outstanding as of December 31, 2025, which reduce available borrowings under the ABL Facility by such amounts.
The obligations of the Borrower under the ABL Facility are guaranteed by the same U.S. subsidiary guarantors that guarantee the 2025 Term Loan Facility (as described above). The obligations of the borrowers and guarantors under the ABL Facility are secured (i) by a first-priority security interest in, among other things, substantially all of their receivables, inventory, deposit accounts and other collateral securing the ABL Facility on a first-priority basis and (ii) by a second-priority security interest in the property and assets of the Borrower and the U.S. subsidiary guarantors that secure the 2025 Term Loan Facility.
The ABL Facility and the 2025 Term Loan Facility contain various restrictive covenants. Each limits the ability of the Borrower and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks, and certain other non-financial restrictive covenants. The ABL Facility also contains one financial covenant which applies when minimum availability under the ABL Facility exceeds a certain threshold. During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1.0 to 1.0. The Company was in compliance with all debt covenants as of December 31, 2025 and 2024, respectively.
Fair Value of Debt
The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As of December 31, 2025 and 2024, the fair value of the Company’s term loan facility was $396,591 and $874,083, respectively. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 7 to these consolidated financial statements for further information on fair value measurements).
Aggregate Long-term Debt Maturities
The aggregate long-term debt maturities are:
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