| Item 1.01 | Entry into a Material Definitive Agreement. |
Non-Recourse Canada SPV Facility
On August 2, 2018, CURO Canada Receivables Limited Partnership, a newly created, bankruptcy-remote special purpose vehicle (the “Canada SPV Borrower”) and an indirect wholly-owned subsidiary of CURO Group Holdings Corp. (the “Company”), entered into a four-year revolving credit facility with Waterfall Asset Management, LLC (“Waterfall”), as administrative agent, and WF Marlie2018-1, Ltd., as lender, that provides for C$175.0 million of initial borrowing capacity and, subject to obtaining additional commitments thereunder, the ability to expand such capacity up to C$250.0 million (“Canada SPV Facility”).
The Canada SPV Facility is secured by a first lien against all assets of the Canada SPV Borrower, which is a special purpose vehicle into which certain eligible receivables originated by our operating entities in Canada are sold pursuant to the Sale and Servicing Agreement (as defined below). The lender advances to the Canada SPV Borrower 80% and 75%, respectively, of the principal balance of the eligible installment andopen-end loans sold to the Canada SPV Borrower. The advance rate is subject to increase or decrease under certain circumstances. As customer loan payments flow into the Canada SPV Borrower, such payments are subjected to a conventionalpriority-of-payment waterfall that, absent a default or certain other trigger events, applies available collections to interest, fees, expenses and any borrowing base shortfall before being released to the Canada SPV Borrower. Borrowings under the Canada SPV Facility bear interest at an annual rate of three-month CDOR plus 6.75% per annum, subject to increase under certain circumstances. The Canada SPV Borrower also pays a 0.50% per annum commitment fee on the unused portion of the commitments.
The Canada SPV Facility contains various conditions to borrowing and affirmative, negative and financial maintenance covenants. The Canada SPV Facility also contains various events of default, the occurrence of which could result in termination of the lenders’ commitments to lend and the acceleration of all obligations of the Canada SPV Borrower under the Canada SPV Facility. This facility matures in 2022.
Pursuant to the Guaranty entered into by the Company on August 2, 2018 (the “Guaranty”) in connection with the Canada SPV Facility, the Company is providing the lenders party to the Canada SPV Facility with a recourse guaranty of up to 10%.
In connection with the Canada SPV Facility, the Canada SPV Borrower also entered into a Sale and Servicing Agreement (the “Sale and Servicing Agreement”), with Cash Money Cheque Cashing Inc. (“Cash Money”), and LendDirect Corp. (“LendDirect”), pursuant to which Cash Money and LendDirect will sell, on a fully serviced basis, certain eligible receivables and related rights and collections to the Canada SPV Borrower.
Finally, in connection with the Canada SPV Facility, the Canada SPV Borrower entered into a General Security Agreement (the “Security Agreement”), with Waterfall, to serve as security in favor of Waterall for the payment and performance of the Canada SPV Borrower’s obligations under the Canada SPV Facility and other related loan documents to which it is a party.
The foregoing descriptions of the Canada SPV Facility, the Guaranty, the Sale and Servicing Agreement and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, which are filed herewith as exhibits and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
The disclosure set forth under Item 1.01 above is incorporated into this Item 2.03 by reference.
