Senior Revolving Credit Facility
On September20, 2019, Regional Management Corp. (the
) and certain of its subsidiaries entered into a Seventh Amended and Restated Loan and Security Agreement (the
) with a syndicate of banks comprised of Wells Fargo Bank, National Association (
), Bank of America, N.A., BMO Harris Financing, Inc., First Tennessee Bank National Association, Texas Capital Bank, N.A., Synovus Bank, Axos Bank, and BankUnited, N.A., and Wells Fargo as Agent. The Loan Agreement provides for a senior revolving credit facility of up to $640.0million, with a borrowing base of up to 85% of secured eligible finance receivables, up to 80% of unsecured eligible finance receivables, and up to 60% of finance receivables const ituting eligible delinquent renewals, in each case, subject to adjustment at certain credit quality levels. The Loan Agreement has an accordion provision that allows for the expansion of the senior revolving credit facility to up to $650.0million. Borrowings under the facility bear interest, payable monthly, at a rate equal to one month LIBOR, with a LIBOR floor of 1.00%, plus a margin of 3.00%, increasing to 3.25% when the availability percentage is less than 10%. The Loan Agreement provides for a process to transition from LIBOR to a new benchmark, if necessary.The Company also pays an unused line fee of 0.65% per annum, payable monthly, when the daily average outstanding balance over a calendar month is less than 30% of the total credit facility. This unused line fee decreases to 0.50% when the daily average outstanding balance is less than 65% and greater than or equal to 30% of the total credit facility, and further decreases to 0.375% when the daily average outstanding balance is equal to or greater than 65% of the total credit facility. The senior revolving credit facility matures on September20, 2022, and is collateralized by certain of the Companys assets, including certain of its finance receivables and the equity interests of certain of its subsidiaries.
The Loan Agreement permits the Company to remain party to the existing warehouse facility and securitization transactions to which it was party prior to entering into the Loan Agreement and, subject to certain conditions and limitations, to enter into one or more other asset-backed securitization and warehouse facility transactions secured by contracts of any size or type. The Loan Agreement also contains certain restrictive covenants, including maintenance of specified interest coverage and debt ratios, restrictions on distributions, limitations on other indebtedness, and certain other restrictions. The Loan Agreement contains customary events of default. If an event of default occurs and is continuing, the agent or the lenders holding more than
of the outstanding amount of the commitments and advances under the senior revolving credit facility (excluding defaulting lenders and including certain required lenders in certain circumstances) may accelerate amounts due under the Loan Agreement (except in the case of a bankruptcy or insolvency event of default, in which case such amounts shall automatically become due and payable).
For a complete description of the terms of the Loan Agreement, see Exhibit 10.1. The foregoing description is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Loan Agreement, which is incorporated by reference herein.
The lenders under the Loan Agreement (and their respective subsidiaries or affiliates) have in the past provided and/or may in the future provide investment banking, underwriting, lending, commercial banking, trust, and other advisory services to the Company and its subsidiaries and affiliates. These parties have received, and may in the future receive, customary compensation from the Company and its subsidiaries and affiliates for such services.
Creation of a Direct Financial Obligation or an Obligation under an
Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form
is incorporated by reference herein.
Financial Statements and Exhibits.
Seventh Amended and Restated Loan and Security Agreement, dated September 20, 2019, by and among Regional Management Corp. and certain of its subsidiaries named as borrowers therein, the financial institutions named as lenders therein, and Wells Fargo Bank, National Association, as Agent.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Regional Management Corp.
Date: September20, 2019
/s/ Robert W. Beck
Robert W. Beck
Executive Vice President and Chief Financial Officer
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