ICHOR HOLDINGS, LTD.ICHR

ICHOR HOLDINGS, LTD. Debt Disclosure

10-KFiled Feb 20, 20263 min read
Note 8 – Long-Term Debt
Long-term debt consists of the following:
December 26,
2025		December 27,
2024
Term loan$125,000 $129,375 
Revolving credit facility— — 
Total principal amount of long-term debt125,000 129,375 
Less unamortized debt issuance costs(1,472)(852)
Total long-term debt, net123,528 128,523 
Less current portion(6,250)(7,500)
Total long-term debt, less current portion, net$117,278 $121,023 
Term loan principal payments are due quarterly on the last business day of each calendar quarter, commencing on December 31, 2025. The credit agreement matures on September 26, 2030. Maturities of long-term debt consist of the following:
2026$6,250 
20277,813 
20287,813 
20297,813 
203095,311 
Total$125,000 
The weighted average interest rate across our credit facilities was 6.16%, 7.31%, and 6.80% during 2025, 2024, and 2023, respectively.
On September 26, 2025, we entered into an amended and restated credit agreement, which includes a group of financial institutions as direct lenders under the agreement (the "credit agreement"). The credit agreement includes a $125.0 million term loan facility and a $100.0 million revolving credit facility (together, “credit facilities”). The revolving credit facility also contains a $20.0 million letter of credit sub-facility and a $10.0 million swingline sub-facility. We incurred debt issuance costs of approximately $1.7 million in connection with the amendment and restatement. Of this amount, $1.2 million of the debt issuance costs are accounted for as a reduction to the carrying value of our long-term debt, and we amortize these costs to interest expense over the term of the credit agreement. The remaining $0.5 million in debt issuance costs were expensed as incurred, which is included in other expense, net on our consolidated statements of operations. Under the debt modification literature codified in ASC 470, a portion of the amendment and restatement was treated as an extinguishment. Accordingly, $0.2 million of existing capitalized debt issuance costs were written off as a loss on extinguishment of debt, which is included in other expense, net on our consolidated statements of operations.
Our credit agreement is secured by our tangible and intangible assets and includes customary representations, warranties, and covenants. We are required to maintain a minimum fixed charge coverage ratio of 1.25 : 1 and a maximum leverage ratio of 3.50 : 1. We were in compliance with both as of December 26, 2025.
As of December 26, 2025, interest is charged at either the Base Rate or SOFR (as such terms are defined in the credit agreement) at our option, plus an applicable margin. The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds Rate plus 0.50%, or iii) SOFR plus 1.00%. The applicable margin on Base Rate and SOFR loans is 0.750% to 1.750% and 1.750% to 2.750% per annum, respectively, depending on our leverage ratio, which is based on trailing 12-month consolidated EBITDA, as defined in our credit agreement. We are also charged a commitment fee of 0.175% to 0.350%, depending on our leverage ratio, on the unused portion of our revolving credit facility. Base Rate interest payments and commitment fees are due quarterly. SOFR interest payments are due on the last day of the applicable interest period, or quarterly for applicable interest periods longer than three months. As of December 26, 2025, our credit facilities bore interest under the SOFR option at 6.17%.

Historical Timeline

Fiscal YearFiled
2025Feb 20, 2026Showing above
2024Feb 21, 2025
2023Feb 23, 2024
2022Feb 24, 2023
2021Feb 28, 2022
2020Mar 5, 2021
2019Mar 6, 2020
2018Mar 8, 2019

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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