America’s Car-Mart increases revolver to $200 million, extends term

By Marisa Wong

Morgantown, W.Va., Dec. 13 – America’s Car-Mart, Inc. said it entered into a second amended and restated loan and security agreement with a group of lenders on Monday.

The agreement amends and restates the company’s amended and restated loan agreement dated March 9, 2012 to extend the term of the revolving credit facilities to Dec. 12, 2019 and increase the total permitted borrowings to $200 million from $172.5 million.

The agreement also includes an accordion feature, allowing for up to $50 million total additional commitments.

The amendment reduces the pricing tiers to three from four. The interest rate is based on the company’s consolidated leverage ratio.

The agreement also requires the company to pay a 0.25% monthly fee for unused commitments.

Borrowings are secured primarily by accounts receivable and inventory of the company’s subsidiaries. The amendment increases the advance rate on accounts receivable with 37- to 42-month terms to 55% from 50% and the advance rate on accounts receivable with 43- to 60-month terms to 50% from 45%.

In addition, the agreement resets the aggregate limit on stock repurchases to $40 million beginning Dec. 12.

The lending group includes Bank of America, NA with a $96 million commitment, up from $79.75 million; BOKF, NA d/b/a Bank of Arkansas with a $44 million commitment, up from $40 million; Commerce Bank with a $16 million commitment, up from $15 million; First Tennessee Bank, NA with a $25 million commitment, up from $20 million; and Arvest Bank with a $19 million commitment, up from $17.75 million.

Bank of America is agent, lead arranger and bookrunner for the amended and restated credit facilities.

“We continue to have what we believe to be one of the strongest balance sheets in our industry. Our debt to equity and debt to finance receivable ratios at Oct. 31, 2016 (53.1% and 26.3%, respectively) are strong and a reflection of our focus on cash flows and customer success,” Jeff Williams, president of America’s Car-Mart, commented in a press release.

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

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