Regional Management, a diversified specialty consumer finance company, and its wholly-owned subsidiary, Regional Management Receivables, entered into a credit agreement with Wells Fargo Bank as lender, providing for a $75 million amortizing loan.
The loan is secured by automobile receivables originated by Regional Management subsidiaries. Regional Management Receivables, as borrower under the facility, will pay interest of 3% per annum on the loan balance from the closing date until the date the loan balance has been fully repaid.
“We are pleased to announce this new credit agreement, which provides us with additional funding capacity at an attractive fixed rate, thus presenting us with further opportunity to grow our business,” said Michael R. Dunn, CEO of Regional Management. “In addition, the structure and processes we have put in place for this credit agreement pave the way for us to close a public securitization in the future if the conditions are desirable. Overall, the new agreement enhances our financial position as we continue to focus on building a profitable and well-managed business for the long term.”
Under the credit agreement, Regional Management will act as servicer of the automobile receivables securing the facility, and certain of Regional Management’s subsidiaries will act as subservicers. Wells Fargo Bank will also act as collateral custodian and backup servicer for the facility, and Wells Fargo Securities will act as administrative agent for the lender. The credit agreement terminates in December 2022. Regional Management used the loan to pay down a portion of its senior revolving credit facility.