Copart lifts revolving commitments to $850 million, repays term loans

By Susanna Moon

Chicago, July 27 – Copart, Inc. upsized its secured revolving credit commitments by another $500 million for total commitments of $850 million, according to an 8-K filing with the Securities and Exchange Commission.

The revolving credit facility was extended to July 21, 2021 from March 15, 2021.

Pricing was reduced to Libor plus 125 basis points initially, with a spread of 100 bps to 175 bps based on leverage. The commitment fee is initially 15 bps and ranges from 12.5 bps to 20 bps.

The company amended its credit agreement last Thursday with Bank of America, NA as administrative agent, Wells Fargo Bank, NA as syndication agent and SunTrust Bank as the documentation agent.

Bank of America Merrill Lynch and Wells Fargo Securities, LLC are lead arrangers and joint bookrunners.

Proceeds will be used for general corporate purposes, including working capital and capital expenditures as well as possible share repurchases, acquisitions or other investments relating to Copart’s expansion strategies.

The amendment also provides for the repayment of term loans under the credit agreement and boosts covenant flexibility with an increase in the total maximum net leverage ratio to 3.75x from 3.5x and a lift in the total net leverage ratio limit on the company’s ability to incur additional senior pari passu debt to 3.25x from 2.5x.

At closing, Copart prepaid the $242.5 million principal amount of term loans with $5 million in cash on hand and with a drawdown under the secured revolving credit commitments.

The purpose of the transactions was “to increase the size and operational availability under Copart’s revolving facility.”

As announced March 17, Copart amended its credit agreement dated Dec. 3, 2014 to increase secured revolving credit commitments by $50 million, bringing the aggregate revolving credit commitments to $350 million.

The amendment also included a new $93.4 million secured term loan due March 15, 2021.

In addition, the company extended the termination date of the revolving credit facility and the maturity date of its existing term loan to March 15, 2021 from Dec. 3, 2019.

Pricing was trimmed to Libor plus 112.5 bps to 200 bps, based on leverage, with initial pricing of Libor plus 137.5 bps.

Copart is a Dallas-based provider of online auctions and vehicle remarketing services.

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