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Bank of America Agents Conn’s $810MM Amended ABL Facility

November 03, 2015, 07:47 AM
Filed Under: Retail

Conn’s, Inc., a specialty retailer of furniture and mattresses, home appliances, consumer electronics and home office products, and provider of consumer credit announced today that it has amended and restated its asset-based revolving credit facility (the “Amended Credit Facility”) that, among other things:

  • Provides total commitments of $810 million;
  • Extends the maturity date from November 25, 2017 to October 30, 2018;
  • 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.

An 8-K Filing indicates that Bank of American, N.A. is serving as administrative agent on the facility.

Concurrently with execution of the Amended Credit Facility, the Company executed a Second Supplemental Indenture (the “Supplemental Indenture”) to the Indenture (as supplemented or amended, the “Indenture”) that governs the Company’s 7.250% Senior Notes due 2022 (the “Notes”). The Supplemental Indenture changes the restricted payments provisions under the Indenture by:

  • Amending, from May 1, 2014 to November 1, 2015, the beginning of the accounting period from which consolidated net income is calculated for purposes of determining the size of the “restricted payment basket” exception to the restricted payments limitation; and
  • Increasing, from $75.0 million to $375.0 million, the dollar threshold exception to the restricted payments limitation (together with the first point, the “Indenture Amendments”).

The company is a specialty retailer currently operating approximately 100 retail locations in Arizona, Colorado, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

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