ITEM 1.01 Entry into a Material Definitive Agreement
Amendment to Non-Recourse Canada SPV Facility
On November 12, 2021, CURO Canada Receivables Limited Partnership, an indirect wholly-owned subsidiary of the CURO Group Holdings Corp. (the “Company”), amended its existing credit facility (the “Non-Recourse Canada SPV Facility”) with Waterfall Asset Management, LLC, as administrative agent, and WF Marlie 2018-1, Ltd., as lender, in order to (i) extend borrowing capacity from C$250 million to C$450 million, (ii) reduce borrowing cost by approximately 200 basis points, (iii) extend the initial maturity date by three years to August 2026, (iv) increase the advance rate from 80% to 90%, (v) expand eligibility to include Flexiti Financial Inc.’s non-prime loans and (vi) add the ability to securitize from the Non-Recourse Canada SPV Facility.
All other material terms of the Non-Recourse Canada SPV Facility remain unchanged.
The foregoing summary of the amendments to the Non-Recourse Canada SPV Facility are qualified in their entirety by reference to the text of the actual amended Non-Recourse Canada SPV Facility.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosure set forth in Item 1.01 under “Amendment to Non-Recourse Canada SPV Facility” is incorporated herein by reference.
ITEM 7.01 Regulation FD Disclosure
The Company is furnishing prospective investors with certain information that has not been previously publicly reported, including certain summary financial information and certain unaudited pro forma financial information, which information will be included in the offering memorandum and a related investor presentation, for the proposed offering described under Item 8.01 to this Current Report on Form 8-K. The disclosures are set forth under the headings “Summary Financial Information” and “Pro Forma Financial Information” in Exhibit 99.3 attached hereto and are incorporated by reference into this Item 7.01.
The information in this Item 7.01, including the disclosure set forth under the headings “Summary Financial Information” and “Pro Forma Financial Information” in Exhibit 99.3, shall not be deemed to be “filed” for purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such materials be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or in the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 8.01 Other Events
Notes Offering
On November 17, 2021, the Company announced that its wholly-owned subsidiary, CURO Finance, LLC (the “Temporary Notes Issuer”), subject to market and other conditions, intends to offer $225 million in aggregate principal amount of senior unsecured notes due 2029 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to non-U.S. persons in accordance with Regulation S under the Securities Act. The Temporary Notes Issuer, which was created solely to issue the notes, will deposit an amount in cash equal to the gross proceeds of the offering, together with an amount in cash (to be contributed by the Company) sufficient to pay for a redemption of the notes on the fifth business day after the 150th day following the date of the issuance of the notes (the “Acquisition Deadline Date”), including interest that would accrue during such period, into a segregated escrow account until the date that certain escrow release conditions are satisfied. Prior to the consummation of the Company’s proposed acquisition of SouthernCo, Inc. d/b/a Heights Finance” (the “Heights Finance Acquisition”), the notes will be secured by a first-priority security interest in the escrow account and all deposits therein.
Among other things, the escrow release conditions include the consummation of the closing of the Heights Finance Acquisition, and the assumption by the Company of all the obligations of the Temporary Notes Issuer under the notes. Upon the release of the proceeds of the notes from escrow, the notes will be guaranteed by the Company and certain of the Company’s restricted subsidiaries on a senior secured basis. If the Heights Finance Acquisition is not consummated on or prior to the Acquisition Deadline Date, the notes will be redeemed by a special mandatory redemption. The special mandatory redemption price will be equal to 100% of the initial issue price of the notes (exclusive of pre-issuance accrued interest) together with accrued but unpaid interest thereon to, but not including, the date of such special mandatory redemption.
The net proceeds from the sale of the notes, together with cash on hand, will be used to finance the Heights Finance Acquisition and to pay fees and expenses related to this offering and the Heights Finance Acquisition.
