Aaron's lifts revolver to $200 million, gets $126.25 million term loan

By Marisa Wong

Madison, Wis., April 15 - Aaron's, Inc. entered into an amended and restated revolving credit and term loan agreement on April 14 with SunTrust Bank as administrative agent for a new $126.25 million term loan that was fully funded at closing, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates the company's existing revolving credit agreement dated May 23, 2008.

The amended and restated credit agreement also increases revolving credit commitments to $200 million from $140 million.

The maturity of the restated credit facility remains at Dec. 13, 2017.

The restated revolver includes a $20 million letter-of-credit sub-facility, increased from $10 million, and a $25 million swingline loan sub-facility, increased from $15 million. It also provides for an uncommitted incremental facility increase option, which permits the company to request an increase in extensions of credit by an aggregate additional principal amount of up to $200 million.

In addition, the pricing grid was amended to increase the applicable margin to 175 basis points to 225 bps from 100 bps to 150 bps for Libor loans.

The restated credit agreement also amended the terms of the prior credit agreement to, among other things, conform the covenants, representations, warranties and events of default to changes related to the company's acquisition of Progressive Finance Holdings, LLC and authorize new senior notes.

On April 14 the company borrowed $65 million under the restated facility to partially fund its merger.

Also on Monday, the company entered into a third amended and restated loan facility agreement with SunTrust Bank to amend and restate its second amended and restated loan facility agreement dated June 18, 2010.

This franchisee loan facility was amended to reduce the maximum commitment available to $175 million from $200 million and to conform the interest rates to the rates applicable to the amended and restated facility above.

The franchisee loan facility amendment also includes changes to covenants to reflect the acquisition of Progressive and to authorize the new senior notes.

Aaron's announced on Tuesday that it acquired Progressive from Summit Partners in an all-cash transaction valued at about $700 million.

Aaron's is an Atlanta-based sales and lease ownership company and specialty retailer of consumer electronics, computers, residential and office furniture, household appliances and accessories. Progressive is a merchandise lease-to-own company based in Draper, Utah.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.