Loar Holdings Inc. Debt Disclosure

8. Long-Term Debt

The Company’s long-term debt at December 31, 2025 consisted principally of borrowings under its credit agreement, dated as of October 2, 2017, as amended from time to time (Credit Agreement) and West Virginia Economic Development Authority notes. The Credit Agreement is secured by substantially all of the assets of the Company.

Credit Agreement

On April 28, 2023, the Company borrowed $20.0 million of available delayed draw term loans under the Credit Agreement (Delayed Draw Term Loans) to finance the acquisition of DAC.

On June 30, 2023, the Company amended the Credit Agreement to extend the maturity date by eighteen months, extending it from October 2, 2024 to April 2, 2026. In addition, the London Interbank Offered Rate (LIBOR) Rate was replaced with Adjusted Term Secured Overnight Financing Rate (SOFR) as an election in which borrowings under the Credit Agreement accrue interest at the SOFR rate plus a margin of 7.25%.

On August 30, 2023, the Company borrowed $33.0 million of available Delayed Draw Term Loans to finance the acquisition of CAV.

On March 26, 2024, the Credit Agreement was amended to extend the termination date of the Delayed Draw Term Loan Commitment by approximately nine months, extending it from April 1, 2024 to December 31, 2024.

On April 10, 2024, the Company amended the Credit Agreement to permit certain non-pro rata open market purchases of term loans pursuant to open market purchases. In addition, the Company also entered into that certain Master Open Market Purchase Agreement, by and between affiliates of lender and the Company (the “Master Open Market Purchase Agreement”) to repurchase term loans on a non-pro rata basis subject to certain conditions as set forth therein.

On May 3, 2024, the Company used a portion of the net proceeds from its IPO to voluntarily repay $284.6 million aggregate principal amount of term loans under the Credit Agreement plus accrued interest of $0.3 million. The Company wrote off $0.8 million in unamortized debt issuance costs and expensed $0.8 million in refinancing costs associated with the amendment of the Credit Agreement. These charges are included in refinancing costs in the consolidated statements of operations during the year ended December 31, 2024.

On May 10, 2024, the Credit Agreement was amended to extend the maturity date to May 10, 2030 from April 2, 2026 and reduce the applicable margin by between 2.0 and 2.5 percentage points based on the Company’s leverage ratio. At the Company’s election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.75% or at the base rate plus the applicable margin of 3.75% as long as the Company maintains a leverage ratio of less than 5.5 to 1. The Company also increased the existing availability under its Delayed Draw Term Loans commitment to $100 million, which terminates if not drawn upon by May 10, 2026. In addition, the existing revolving line of credit under the Credit Agreement was replaced with a new revolving credit commitment of $50 million. The unused portion of the revolving line of credit carries a commitment fee of 0.375%. Loans outstanding under the revolving line of credit, if any, mature on May 10, 2029.

On August 26, 2024, the Credit Agreement was amended to make available to the Company an incremental term loan in an aggregate principal amount equal to $360 million for purposes of (i) paying a portion of the consideration payable by it pursuant to the terms of that certain purchase agreement (Purchase Agreement) pursuant to which the Company agreed to purchase from AAI Parent all the issued and outstanding equity interests of AAI, (ii) paying fees and expenses incurred in connection with the foregoing, and (iii) otherwise to fund working capital and general corporate purposes.

On December 17, 2024, the Company used the net proceeds from its Follow-on Offering and cash from operations to repay $330.0 million aggregate principal amount of term loans under its Credit Agreement plus accrued interest of $1.5 million. The Company wrote-off $4.8 million in unamortized debt issuance costs which is included in refinancing costs in the consolidated statements of operations during the year ended December 31, 2024.

On August 1, 2025, the Credit Agreement was amended to reduce the applicable margin by 0.5%. At the Company's election, interest on loans will accrue at the SOFR rate plus the applicable margin of 4.25% or at the base rate plus the applicable margin of 3.25% as long as the Company maintains a leverage ratio of less than 5.5 to 1.

On November 25, 2025, the Credit Agreement was amended to increase the Delayed Draw Term Loans commitment by an aggregate principal amount of $175 million for a total Delayed Draw Term Loans commitment in an aggregate principal amount equal to $275 million. In addition, the availability period of the Delayed Draw Term Loans commitment was extended to September 30, 2026.

On December 23, 2025, the Credit Agreement was amended to make available to the Company an incremental term loan in an aggregate principal amount equal to $445 million for purposes of (i) paying a portion of the consideration for the LMB acquisition, (ii) financing the payment of LMB debt, (iii) paying fees and expenses incurred in connection with the foregoing, and (iv) otherwise to fund working capital and general corporate purposes.

The Credit Agreement requires the maintenance of a quarterly leverage ratio. There are also certain non-financial covenants in place limiting the Company, from among other things, incurring other indebtedness, creating any liens on its properties, entering into merger or consolidation transactions, disposing of all or substantially all of its assets and payment of certain dividends and distributions. The Company was in compliance with all financial and nonfinancial covenants of the Credit Agreement as of December 31, 2025.

The Credit Agreement requires mandatory prepayments of the principal amount if there is excess cash flow, as defined, during a calendar year.

The Credit Agreement permits voluntary principal prepayments, in whole or in part, with no premium for any prepayments made. Any voluntary loan prepayments are applied to reduce future scheduled installments of principal in the order specified by the Company, or if the Company does not specify, the prepayment is applied to reduce the scheduled installments of principal in direct order of maturity. During the year ended December 31, 2024, the Company made voluntary prepayments of $614.6 million. There were no voluntary prepayments made under the Credit Agreement during the year ended December 31, 2025.

The Company paid approximately $8.9 million and $8.1 million of debt issuance costs for the years ended December 31, 2025 and 2024, respectively. The unamortized balance of deferred debt issuance costs was approximately $12.8 million as of December 31, 2025, of which approximately $12.2 million has been recorded as a reduction to the outstanding long-term debt and approximately $0.6 million, which is related to the revolving credit facility, has been recorded in other current assets on the Company’s consolidated balance sheet. The unamortized balance of deferred debt issuance costs was approximately $4.8 million as of December 31, 2024, of which approximately $4.1 million has been recorded as a reduction to the outstanding long-term debt and approximately $0.7 million, which is related to the revolving credit facility, has been recorded in other current assets on the Company’s consolidated balance sheet.

At December 31, 2025, there was $726.4 million outstanding under the Credit Agreement, and there remained available $275.0 million in Delayed Draw Term Loans Commitment and a $50.0 million revolving line of credit. As of December 31, 2025 and 2024, the weighted average interest rate for all outstanding loans under the Credit Agreement was 8.0% and 9.1%, respectively. The annual effective interest rate under the Credit Facility for the years ended December 31, 2025 and 2024 was 9.0% and 11.1%, respectively.

Other

On July 8, 2025, the Company, through its wholly-owned subsidiary, SMR Acquisition LLC, entered into an agreement with the West Virginia Economic Development Authority (WVEDA) for a $1.5 million performance-based forgivable note. This note was made under an aggregate commitment agreement of $5.5 million. The loan will be forgiven in whole or in part if the Company meets the performance requirements, which include capital investments and minimum employment levels during the three years ended July 8, 2028. Under the terms of the agreement, during the three years ended July 8, 2028, principal payments and interest are deferred. Achievement of the performance requirements will result in any principal and interest amounts being fully forgiven. If the performance requirements are not achieved, on July 8, 2028 the note will convert to a term loan which is payable ratably over a term of twenty-four months and bears interest at the July 8, 2028 prime rate plus 2%. If the performance objectives are partially achieved, a portion of the note which is equivalent to the achieved percentage will be forgiven, and the remainder will be converted to a term loan payable under the terms described above.