Conn’s, a specialty retailer of furniture and mattresses, home appliances, consumer electronics and home office products, and provider of consumer credit announced it has amended and restated its asset-based revolving credit facility that, among other things:

  • Provides total commitments of $810 million;
  • Extends the maturity date from November 25, 2017 to October 30, 2018;
  • A reduction in A/R advance rate from 80% to 75%
  • Increases maximum inventory component of borrowing base from $100 million to $175 million;
  • Increases the total leverage ratio covenant from 2.0x to 4.0x;
  • Eliminates the fixed charge coverage ratio covenant and replaces it with an interest coverage covenant; and
  • Adds a new minimum liquidity requirement for repurchases of the company’s common stock, notes and other debt pre-payment, which, combined with the new total leverage ratio covenant, is expected to provide the company greater flexibility for repurchases.

According to a related 8-K filing, the lender group is led by Bank of America that served in its capacity as administrative agent for the lenders.

Norm Miller, Conn’s president and chief executive officer commented, “With the completion of the amendments to our bank facility and senior notes indenture, we are also pleased to announce an additional $100 million share repurchase program which supports our goal of returning value to our shareholders while investing in our business and improving our capital structure. We intend to complete the repurchases under this authorization during our fiscal quarter ending January 31, 2016, as long as market conditions and other factors continue to support such use of our capital. The amendments to our bank facility and senior note indenture give us the ability to consider additional repurchase programs over time, dependent on market conditions, capital availability and other factors.”