Debt Obligations |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Obligations | 9. DEBT OBLIGATIONS Lines of Credit Prior to April 29, 2026, PSCM had two lines of credit from JPMorgan Chase Bank, N.A. (the “Lender”): (i) the “2014 Line of Credit” and (ii) the “2021 Line of Credit” (collectively, the “JPM Lines of Credit”). In connection with the Combined IPO, on April 29, 2026, PSCM fully repaid all outstanding balances and closed the JPM Lines of Credit. During the three and six months ended June 30, 2026 and 2025, PSCM did not borrow or repay any principal on the JPM Lines of Credit, other than the final repayment. As of the repayment date and December 31, 2025, $34.8 million of principal was outstanding and $10.2 million was left undrawn on the 2014 Line of Credit, and there was no principal balance outstanding with $80.0 million left undrawn on the 2021 Line of Credit. The principal amount outstanding on the 2014 Line of Credit as of December 31, 2025 is included in loans payable. The outstanding borrowings of the 2014 Line of Credit had an annual interest rate of the Secured Overnight Financing Rate (“SOFR”) screen rate +2.20%, and any outstanding borrowings of the 2021 Line of Credit would have had an annual interest rate of the SOFR screen rate + 2.35%. The Lines of Credit were unsecured and personally guaranteed by Mr. Ackman (the “Guarantor”). The Lines of Credit included provisions that limited the ability of PSCM to incur additional indebtedness or to create additional liens or other encumbrances on PSCM or the Guarantor’s assets, aside from additional financing from the Lender and certain other permitted indebtedness. The 2014 Line of Credit required the Guarantor to maintain a net worth of at least $1 billion, exclusive of any interest in PSCM. The Guarantor was also required to maintain at least $250 million of aggregate liquidity that was free and clear of any and all encumbrances, consisting of liquid assets at the bank, and/or beneficial ownership in PSCM or equity in third-party hedge funds with quarterly liquidity or better. PSCM and the Guarantor had complied with the financial covenants imposed by the 2014 Line of Credit agreement throughout the borrowing period. The 2021 Line of Credit was secured by a pledge and security agreement whereby PSCM granted the Lender a security interest in PSCM’s management fees. Senior Secured Credit Facilities On April 30, 2026, in connection with the Combined Transaction, the Company entered into a credit agreement (the "Credit Agreement") with a syndicate of banks led by Bank of America, N.A., as administrative agent. The Credit Agreement provides for (i) a senior secured revolving credit facility with an aggregate principal amount of $250.0 million (the "2026 Revolver") and (ii) a senior secured term loan facility with an aggregate principal amount of $100.0 million (the "2026 Term Loan," and together with the 2026 Revolver, the "Senior Credit Facilities"). The Senior Credit Facilities mature on April 30, 2029. The Credit Agreement also provides for an uncommitted incremental facility option, permitting the Company to request additional revolving or term loan commitments of up to $100.0 million, which would increase total capacity under the Senior Credit Facilities to $450.0 million. Availability under the incremental facility is subject to reduction by certain other incremental indebtedness the Company may incur. Because the incremental facility is uncommitted, any such increase is subject to the receipt of commitments from existing or new lenders, none of which is obligated to provide the additional amount, and to the satisfaction of customary conditions.
Borrowings under the Senior Credit Facilities bear interest at a rate equal to, at the Company's option, either (i) Term SOFR plus an applicable margin or (ii) a base rate equal to the highest of (a) the federal funds effective rate plus 0.50%, (b) Bank of America's publicly announced prime rate, (c) Term SOFR plus 1.00% and (d) 1.00%, in each case plus an applicable margin. The applicable margins vary based on the Company's consolidated leverage ratio. For the periods presented, the Senior Credit Facilities accrued an interest rate of SOFR +1.75%.
The obligations under the Credit Agreement are guaranteed by certain of the Company's subsidiaries and are secured by first-priority liens on substantially all of the assets of the loan parties, subject to customary exceptions and exclusions. The Credit Agreement contains financial covenants requiring the Company to (i) maintain a consolidated leverage ratio of no greater than 2.50 to 1.00, (ii) maintain minimum assets under management and (iii) limit declines in the net asset value of specified funds, in each case as set forth in the Credit Agreement. The Credit Agreement also contains customary representations and warranties, affirmative and negative covenants and events of default. As of June 30, 2026, the Company was in compliance with all covenants under the Credit Agreement.
In connection with entering into the Credit Agreement, the Company incurred $2,992,917 of up-front costs which are deferred as debt discount and issuance costs. Deferred costs are presented as a direct deduction from the carrying amount of the related borrowings and amortized to interest expense using the effective interest method over the three-year term. Additionally, the Company is obligated to pay a quarterly commitment fee on the undrawn portion of the 2026 Revolver based on the Company’s consolidated leverage ratio. For the periods presented, the commitment fee is 0.20% of the unused balance of the 2026 Revolver and is recorded in interest expense. The following table summarizes the Company’s outstanding debt as of June 30, 2026:
The following tables summarize the interest expense and average interest rate of the Company’s outstanding debt:
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