v3.25.2
Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt
15 — Debt

As of June 30, 2025 and December 31, 2024, "Long-term debt, net" consisted of the following:

June 30,December 31,
Maturity20252024
in thousands
2025 JPM Credit FacilityMarch 2030$111,599 $— 
Prior JPM Credit Facility (1)
October 2026— 50,296 
BAC Credit FacilityDecember 202638,871 30,193 
State Farm Term LoanSeptember 203325,000 25,000 
Notes payable
2025
580 792 
Total debt176,050 106,281 
Less: BAC Credit Facility, current portion(21,596)— 
Less: Notes payable, current portion(580)(792)
Less: Unamortized debt issuance costs related to the State Farm Term Loan(491)(521)
Total long-term debt, net$153,383 $104,968 
(1)    The Prior JPM Credit Facility, originally scheduled to mature in October 2026, was terminated upon the initiation of the 2025 JPM Credit Facility.
2025 JPM Credit Facility

In March 2025, THG entered into a credit agreement with JPMorgan Chase Bank, N.A. ("JPM"), as administrative agent, issuing bank and swingline lender, the foreign subsidiary borrowers thereto, and the other financial institutions party thereto as lenders (the "2025 JPM Credit Agreement").

The 2025 JPM Credit Agreement provides for a senior unsecured revolving credit facility (the "2025 JPM Credit Facility") with an aggregate borrowing capacity of $375.0 million. The 2025 JPM Credit Agreement includes (i) a $175.0 million sublimit for letters of credit, (ii) a $100.0 million sublimit for foreign currency borrowings, and (iii) an uncommitted accordion feature of $75.0 million, plus an unlimited amount so long as THG's net leverage ratio is below 3.25. The 2025 JPM Credit Agreement matures in March 2030, but may be extended if agreed to by THG and the lenders party thereto. Any unpaid balance on the 2025 JPM Credit Facility is due at maturity.

THG used borrowings from the 2025 JPM Credit Facility to repay in full all indebtedness, liabilities and other obligations outstanding under, and terminated, THG's prior credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, issuing bank and swingline lender, the foreign subsidiary borrowers party thereto, and the other financial institutions party thereto as lenders ("Prior JPM Credit Agreement"). THG incurred approximately $1.0 million in fees for the 2025 JPM Credit Agreement, which, along with the remaining unamortized fees associated with the Prior JPM Credit Agreement, are being amortized over the agreement's five-year term.

The 2025 JPM Credit Facility accrues interest at the applicable reference rate, primarily Term SOFR, depending on the currency of the borrowing plus an applicable margin determined by the Company's net leverage ratio for the preceding period (as defined in the 2025 JPM Credit Facility). The effective interest rates related to the 2025 JPM Credit Agreement and the Prior JPM Credit Agreement were 5.81% and 6.90% for the six months ended June 30, 2025 and 2024, respectively.

The 2025 JPM Credit Agreement requires THG to, among other things, meet certain financial covenants, including a minimum fixed charge coverage ratio test and a maximum leverage ratio test. As of June 30, 2025, THG was in compliance with these financial covenants.

As of June 30, 2025, the carrying value of the outstanding borrowings under the 2025 JPM Credit Facility approximated its fair value due to the variable interest rates associated with the outstanding borrowings.
BAC Credit Facility

BAC and its wholly owned subsidiary BAC Funding 2023-1, LLC, as borrower, have a revolving credit agreement (the "BAC Credit Agreement") that provides for a revolving credit facility (the "BAC Credit Facility") with an aggregate borrowing capacity of $75.0 million. The BAC Credit Facility's borrowing base is determined by the carrying value of certain BAC notes receivable. As of June 30, 2025, the applicable borrowing base and outstanding borrowings for the BAC Credit Agreement were $38.9 million.

The revolving borrowing period expires in December 2025, followed by an amortization period until the BAC Credit Facility ultimately matures in December 2026. The borrowing period and the maturity date may be extended by one year if requested by BAC and agreed by the administrative agent. BAC is not a borrower or guarantor of the BAC Credit Facility.

BAC and certain of its subsidiaries may transfer notes receivable to wholly owned, bankruptcy remote SPEs to secure borrowings, isolating these assets from the Company's other obligations. Recourse is limited to (i) an obligation of the applicable seller to repurchase a note receivable if it is determined that there was a breach of any representation or warranty relating to such note receivable as of the relevant date specified in the related transfer agreement and (ii) a limited guarantee for certain liabilities that may result under certain foreign exchange hedging activity of one of the SPEs.

BAC and BAC Funding 2023-1, LLC are required, among other things, to meet certain financial covenants including that BAC, as the servicer, maintain a minimum tangible net worth, minimum liquidity balances, and an indebtedness to tangible net worth ratio. As of June 30, 2025, the Company was in compliance with the financial covenants under the BAC Credit Agreement.

As of June 30, 2025, the carrying value of the $38.9 million in outstanding borrowings under the BAC Credit Facility approximated its fair value due to the variable interest rates associated with the outstanding borrowings. The current portion of the outstanding BAC Credit Agreement borrowings is recorded within "Accounts payable, accrued expenses and other current liabilities" on the Condensed Consolidated Balance Sheets.
State Farm Term Loan

In September 2023, Hagerty Re entered into an unsecured term loan credit facility with State Farm in the aggregate principal amount of $25.0 million (the "State Farm Term Loan"). The State Farm Term Loan bears interest at a rate of 8.0% per annum and will mature in September 2033. State Farm is a related party to the Company. Refer to Note 21 — Related-Party Transactions for additional information.

Notes Payable

As of June 30, 2025 and December 31, 2024, the Company had outstanding notes payable, which are used to fund certain loans made by BAC in the United Kingdom ("U.K."), totaling $0.6 million and $0.8 million, respectively. The effective interest rates for these notes payable is 9.8% with repayment due between August and October 2025. Refer to Note 7 — Notes Receivable for additional information on the lending activities of BAC.

Letters of Credit
As of June 30, 2025, the Company has authorized three letters of credit for a total of $10.8 million for operational purposes, primarily related to Hagerty Re's Section 953(d) tax structuring election, and to a much lesser extent, a requirement under a quota share agreement, and lease down payment support.