| Item 1.01. | Entry into a Material Definitive Agreement. |
Sixth Amendment to Senior Revolving Credit Facility
On November 22, 2022, Regional Management Corp. (the “Company”) and certain of its subsidiaries entered into the Sixth Amendment to Seventh Amended and Restated Loan and Security Agreement (the “Sixth Amendment”), among the Company and its subsidiaries named as borrowers therein (collectively with the Company, the “Revolving Borrowers”), the financial institutions named as lenders therein (the “Revolving Lenders”), and Wells Fargo Bank, National Association, as agent (the “Revolving Agent”). The Sixth Amendment amends the Seventh Amended and Restated Loan and Security Agreement, dated as of September 20, 2019 (the “Loan Agreement”), among the Revolving Borrowers, the Revolving Lenders and the Revolving Agent. The Loan Agreement was previously filed with the Securities and Exchange Commission (the “SEC”) by the Company on September 20, 2019 as Exhibit 10.1 on Form 8-K.
The Sixth Amendment amends the Loan Agreement to, among other things, (i) remove Axos Bank as a lender and reduce the commitments of the remaining lenders under the credit facility to $420 million, (ii) provide for a borrowing base between 63% and 83% of eligible receivables based on added credit quality levels, and further provide for a borrowing base between 48% and 83% of eligible receivables for the months ending October 31, 2022, November 30, 2022, December 31, 2022 and January 31, 2023, based on specified credit quality levels, (iii) add a minimum total portfolio collateral performance financial covenant of 21%, (iv) make the unused line fee either 0.50% or 1.0% per annum based on credit facility exposure, (v) increase the collateral performance indicator covenant level to 50% for the months ending October 31, 2022, November 30, 2022, December 31, 2022 and January 31, 2023, and to 35% thereafter, and (vi) make certain other clarifying and conforming changes.
For a complete description of the terms of the Sixth Amendment, see Exhibit 10.1 hereto. The foregoing description of the Sixth Amendment is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Sixth Amendment, which is incorporated by reference herein.
Amendment to the RMR V Warehouse Facility
On November 22, 2022, the Company and its wholly-owned subsidiary, Regional Management Receivables V, LLC (“RMR V”), entered into the Amendment No. 4 to Credit Agreement (the “RMR V Amendment”), by and among the Company, as servicer, RMR V, as borrower, the lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, National Association, acting through its corporate trust services division, as account bank and backup servicer (the “Account Bank” and “Backup Servicer”). The RMR V Amendment amends the Credit Agreement, dated as of April 28, 2021 (the “RMR V Credit Agreement”), by and among the Company, as servicer, RMR V, as borrower, the lenders from time to time parties thereto, the Administrative Agent, the Account Bank and the Backup Servicer. The RMR V Credit Agreement was previously filed with the SEC by the Company as Exhibit 10.1 to the Current Report on Form 8-K dated April 29, 2021. The RMR V Amendment amends the RMR V Credit Agreement to, among other things, (i) change one of the alternate rates of interest for advances made pursuant to the RMR V Credit Agreement from LIBOR to the secured overnight financing rate, or SOFR, calculated as daily simple SOFR, as administrated by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate), (ii) modify the concentration limits applicable to the aggregate principal balance of the eligible receivables financed pursuant to the RMR V Credit Agreement, (iii) extend the “Scheduled Commitment Termination Date” under the RMR V Credit Agreement to November 28, 2024, and (iv) add a “Securitization Trigger Holiday” pursuant to which certain ratios and percentages will not apply as “Level I Trigger Events”, “Level II Trigger Events” and “Level III Trigger Events” for a specified period following a broadly marketed securitization subject to the satisfaction of certain conditions. The margin applied in calculating the rate of interest on the advances made pursuant to the RMR V Credit Agreement was increased to 2.75% pursuant to a separate letter agreement, dated November 22, 2022, by and among the Company, as servicer, RMR V, as borrower, and the Administrative Agent.
