America’s Car-Mart decreases revolver, extends term, tweaks pricing

By Wendy Van Sickle

Columbus, Ohio, March 5 – America’s Car-Mart, Inc. entered into amendment No. 6 to the third amended and restated loan and security agreement, extending the term and increasing the size of the company’s existing revolver, according to an 8-K filing with the Securities and Exchange Commission.

The agreement was signed on Feb. 28.

The amendment decreases the total permitted borrowings under the revolver to $340 million from $600 million and extends the term to Sept. 29, 2025.

The reduction included a decrease in the line of credit of subsidiary Colonial Auto Finance, Inc. to $310 million from $570 million. The America’s Car Mart Inc. and Texas Car-Mart, Inc. line of credit remains at $30 million.

The amendment also restores the accordion feature to $100 million.

The company said the reduction was primarily to improve efficiencies in the use of fundings since it is utilizing the asset-backed securitization market and was also a function of the number of lenders in the facility.

While the reduction in total permitted borrowings will reduce the company’s exposure to unused line fees, the amendment increased the unused line fee rate to 50 basis points from 37.5 bps if the average daily amount of the revolver loan borrowings outstanding during the immediately preceding month is less than 50% of total revolver commitments. The unused line fee rate for average daily revolver loan borrowings outstanding during the immediately preceding month equal to or exceeding 50% of total revolver commitments is unchanged at 25 bps.

Further the amendment sets interest at adjusted term SOFR plus 350 bps, removing the previous pricing tiers, which were based on consolidated leverage ratio.

Also, the amendment sets the required fixed charge coverage ratio at 1 to 1 through Aug. 31, 2024, 1.15 to 1 from Sept. 30, 2024 through Dec. 31, 2024, and 1.25 to 1 beginning Jan. 31, 2025 and thereafter.

BMO Bank, NA, Axos Bank, BOK Financial, MUFG Bank, Ltd., First Horizon Bank, Commerce Bank and Arvest Bank are the participating lenders. BMO Bank is the agent, lead arranger and book manager.

America’s Car-Mart operates 143 automotive dealerships in 11 states. The company is based in Bentonville, Ark.

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