Aaron's ups franchisee facility to $175 million, extends maturity

By Angela McDaniels

Tacoma, Wash., May 29 - Aaron's, Inc. (formerly Aaron Rents, Inc.) amended its franchisee loan facility agreement on May 22, extending the maturity date to May 22, 2010 and increasing the maximum commitment amount to $175 million from $125 million.

The facility allows the company's franchisees to borrow funds guaranteed by the company, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also increased the maximum available amount of swing loans to $20 million from $8 million, increased the company's commitment fees and interest and modified some exhibits to the facility, including the form of franchisee borrower loan and security agreement.

The margin is 225 to 300 basis points, depending on leverage.

The company remains subject to the same financial covenants, which forbid it from exceeding certain debt-to-equity levels and require the maintenance of a minimum net worth ratio, a minimum ratio of debt to EBITDA and a minimum fixed charge coverage ratio.

SunTrust Bank is the servicer for the facility.

Aaron's is an Atlanta-based retailer and renter of consumer electronics, computers, residential and office furniture, household appliances, and accessories.

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