Wilmington Trust and certain lenders entered into a new secured credit agreement with KLDiscovery to provide revolving credit loans in an aggregate principal amount of $40 million.

The agreement will also lower KLDiscovery’s annual debt payments from $17 million to $3 million and terminate all lending commitments under its prior agreement with Royal Bank of Canada.

The new credit agreement also provides for initial term loans in an aggregate principal amount of $300 million, delayed draw term loans in an aggregate principal amount of $50 million and revolving credit loans in an aggregate principal amount of $40 million. The revolving credit loans represent an increase of $10 million over the prior revolving credit loans they replace.

The initial term loans and delayed draw term loans will bear interest at the adjusted Eurocurrency Rate plus 6.5% per annum, or with respect to base rate loans, the base rate plus 5.5% per annum. The revolving credit loans will bear interest at the adjusted Eurocurrency Rate plus 4% per annum, or with respect to base rate loans, the base rate plus 3% per annum. Rates are at the discretion of the loan parties. The initial term loans and delayed draw term loans amortize at a rate of 1% of the aggregate principal amount of initial term loans and delayed draw term loans outstanding, payable quarterly. This amortization rate is an improvement from the prior credit agreement, decreasing from 5% in the prior credit agreement to 1% pursuant to the new credit agreement.

The revolving credit loans, initial term loans and delayed draw term loans are each scheduled to mature on the earlier of Feb. 8, 2026, and six months prior to maturity of KLDiscovery’s convertible debentures due 2024.

“We are pleased we are able to refinance our former debt with more favorable terms and financial covenants as we continue to strengthen KLDiscovery for the long term,” Christopher Weiler, CEO of KLDiscovery, said. “Lowering our annual debt payments significantly improves our annual cash flow.”

KLDiscovery is a global provider of electronic discovery, information governance and data recovery services.