Update: JPMorgan Chase Agents New Rent-A-Center Refinancing
As an update to a Rent-A-Center news release published earlier today (3/20/14) regarding a new $900 million senior secured credit facility encompassing a $225 million term loan and a $675 million revolver, a recent 8-K filing revealed the following:
According to the filing, the lender group was led by JPMorgan Chase as administrative agent with Bank of America, BBVA Compass Bank, Wells Fargo Bank and SunTrust Bank, as syndication agents.
Borrowings under the credit agreement bear interest at varying rates equal to the Eurodollar rate plus 1.50% to 2.75%, or the ABR rate plus 0.50% to 1.75%, at the Company’s election. The margins on the Eurodollar rate and on the ABR rate for borrowings under the revolving facility, which are initially 2.25% and 1.25%, respectively, may fluctuate based upon an increase or decrease in the company’s consolidated leverage ratio as defined by a pricing grid included in the credit agreement. The margins on the Eurodollar rate and on the prime rate for term loans are 3.00% and 2.00%, respectively, but may also fluctuate in the event the all-in pricing for any subsequent incremental term loan exceeds the all-in pricing for existing term loans by more than 0.50% per annum.
A commitment fee equal to 0.30% to 0.50% of the unused portion of the revolving facility is payable quarterly, and fluctuates dependent upon an increase or decrease in the company’s consolidated leverage ratio. The initial commitment fee is equal to 0.45% of the unused portion of the revolving facility.
The company’s borrowings under the credit agreement are, subject to certain exceptions, secured by a security interest in substantially all of the company’s tangible and intangible assets, including intellectual property, and is also secured by a pledge of the capital stock of the company’s U.S. subsidiaries. The credit agreement also permits the company to increase the amount of the Term Loans and/or the revolving facility from time to time on up to three occasions, in an aggregate amount of no more than $250 million, provided that the company is not in default at the time and has obtained the consent of the administrative agent and the lenders providing such increase.
Previously on abfjournal: Rent-A-Center Announces New Credit Facility Refinancing, March 20, 2014