America’s Car-Mart extends $145 million revolver, amends pricing

By Angela McDaniels

Tacoma, Wash., Oct. 10 – America’s Car-Mart, Inc., a Texas corporation, amended its $145 million revolving credit facility to extend the maturity date to Oct. 8, 2017 and change pricing, according to an 8-K filing with the Securities and Exchange Commission.

Subsidiaries Colonial Auto Finance, Inc., Texas Car-Mart, Inc. and America’s Car Mart, Inc., an Arkansas corporation, are the borrowers under the revolver.

The amendment added a new pricing tier for determining the interest rate, based on the company’s consolidated leverage ratio, and increased by 12.5 basis points each of the three existing pricing tiers.

The current interest rate following the amendment is Libor plus 237.5 bps. The margin over Libor ranges from 225 bps to 287.5 bps.

Borrowings are secured primarily by the subsidiaries’ accounts receivable and inventory. The company said the amendment enhanced the advances available to Colonial Auto Finance on its accounts receivable by adding advances at rates ranging from 45% to 50% on medium-term and long-term vehicle contracts, in addition to existing Colonial Auto Finance advance rates of up to 55% for all other contracts.

The amendment also changed one of two alternative distribution limitations related to repurchases of the company’s stock. The amendment (a) resets the $40 million aggregate limit on repurchases beginning with the effective date of the amendment (updated from March 9, 2012), (b) redefines the aggregate amount of repurchases to be net of proceeds received from the exercise of stock options and (c) changes the requirement that the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases be equal to or greater than 30% (increased from 25%) of the sum of the borrowing bases

The amendment did not change the alternative distribution limitation that allows company stock repurchases so long as the aggregate amount of such repurchases does not exceed 75% of the consolidated net income of the company measured on a trailing-12-month basis; provided that immediately before and after giving effect to the stock repurchases, at least 12.5% of the aggregate funds committed under the credit facilities remain available.

The amendment was made Wednesday. It required a closing fee of $217,500 and an arrangement fee of $32,500.

Bank of America, NA is the administrative agent.

America's Car-Mart is a Bentonville, Ark.-based operator of automotive dealerships.

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