8. Debt
The Company’s debt consisted of the following:
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| As of March 31, |
| 2025 | | 2024 |
| Principal Outstanding | | Carrying Value | | Interest Rate | | Principal Outstanding | | Carrying Value | | Interest Rate |
| Term Loan | $ | 93,125 | | | $ | 92,736 | | | 6.25 | % | | $ | 96,875 | | | $ | 96,531 | | | 7.25 | % |
| 2020 Multi-Draw Facility | 100,000 | | | 99,691 | | | 3.50 | % | | 100,000 | | | 99,628 | | | 3.50 | % |
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| | | | | | | | | | | |
| Senior Notes | 100,000 | | | 97,876 | | | 5.28 | % | | — | | | — | | | |
| Total Debt | $ | 293,125 | | | $ | 290,303 | | | | | $ | 196,875 | | | $ | 196,159 | | | |
On October 7, 2024, the Company amended its existing Term Loan and Security Agreement (as amended, the “Term Loan Agreement”), Revolving Loan and Security Agreement (as amended, the “Revolving Loan Agreement”), 2020 Multi-Draw Term Loan and Security Agreement (as amended, the “2020 Multi-Draw Term Loan Agreement”), and 2022 Multi-Draw Term Loan and Security Agreement (as amended, the “2022 Multi-Draw Term Loan Agreement”), (collectively, the “Loan Agreements”). The amendments included naming JP Morgan Chase Bank, N.A. as the successor-in-interest to First Republic Bank, updating the maturity dates for the Loan Agreements and allowing for the incurrence of additional indebtedness.
The Term Loan Agreement has a maturity date of July 1, 2029. The Revolving Loan Agreement has a $50,000 borrowing capacity, a maturity date of October 6, 2027, and the interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%. The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100,000 that the Company has fully drawn down. Borrowings accrue interest at a fixed per annum rate of 3.50% and mature on April 1, 2030. The 2022 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $75,000. Borrowings accrue interest at a fixed per annum rate equal to the prime rate minus 1.50% subject to a floor of 3.00% and matures on October 1, 2029. As of March 31, 2025, the Company had no borrowings outstanding under the 2022 Multi-Draw Term Loan Agreement.
The Loan Agreements contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, pay dividends or make distributions, engage in transactions with affiliates and take certain actions with respect to management fees. They also require HLA to maintain, among other requirements, (i) a specified amount of management fees, (ii) a specified amount of adjusted EBITDA, as defined therein, and (iii) a specified minimum tangible net worth, during the term of each of the Loan Agreements.
On October 8, 2024, HLA issued $100,000 aggregate principal amount of its 5.28% senior notes due October 15, 2029 (the “Senior Notes”), pursuant to a note purchase agreement (the “Note Purchase Agreement”), among HLA and the institutional purchasers party thereto in a private placement transaction. Interest on the Senior Notes is payable semi-annually in arrears, commencing on April 15, 2025. Interest on the Senior Notes accrues from and including October 8, 2024.
The aggregate minimum principal payments on the Company’s outstanding debt are due as follows:
| | | | | |
| For the fiscal year ending March 31, | |
| 2026 | $ | 12,500 | |
| 2027 | 21,875 | |
| 2028 | 32,500 | |
| 2029 | 55,000 | |
| 2030 | 158,750 | |
| Thereafter | 12,500 | |
| Total | $ | 293,125 | |
approximated fair value. The 2020 multi-draw facility had an estimated fair value of $99,305 and $87,611 as of March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company’s outstanding Notes had an estimated fair value of $99,222. The estimated fair value of debt is based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy.