Senior Debt

12 Months Ended

Dec. 31, 2020

Senior Debt

As of December 31, 2020, we were party to a Term Loan Credit Agreement (the “Prior Term Loan Credit Agreement”) providing for a seven-year $200 million senior secured term loan facility and an Asset Based Loan Credit Agreement (the “Prior ABL Credit Agreement”) providing a five-year asset-based revolving credit facility (the “Prior ABL Credit Facility”) with commitments of up to $300 million, the proceeds of which were used for the redemption of all of our previously outstanding senior notes due 2020.

The amount of outstanding borrowings under the Prior Term Loan Credit Agreement was $197.5 million at December 31, 2020. We had no amounts outstanding under our Prior ABL Credit Facility at December 31, 2020, and had $209.3 million available for borrowing.

Proceeds from the Prior Term Loan Credit Agreement were net of original issue discount of $2.0 million upon issuance from the lenders. In addition, in connection with the closing of the Prior Term Loan Credit Agreement and the Prior ABL Credit Agreement, we incurred approximately $6.3 million in debt issuance costs. As of December 31, 2020, the total unamortized balance of debt issuance costs and original issue discount related to our Prior Term Loan Credit Agreement and Prior ABL Credit Agreement reported in our consolidated balance sheet were $5.4 million and $1.6 million, respectively.

We also utilized the Prior ABL Credit Facility for the issuance of letters of credit. As of December 31, 2020, we have issued letters of credit in the aggregate outstanding amount of $90.7 million primarily relating to workers compensation insurance claims.

The debt facilities as of December 31, 2020 and 2019 are as follows:


		December 31, 2020						December 31, 2019
(In thousands)	Facility Maturity	Maximum Facility		Amount Outstanding		Amount Available		Maximum Facility		Amount Outstanding		Amount Available
Senior Debt:
Prior Term Loan	August 5, 2026	$	200,000	$	197,500	$	—	$	200,000	$	199,500	$	—
Prior ABL Credit Facility	August 5, 2024	300,000		—		209,268		300,000		40,000		168,200
Total		500,000		197,500		209,268		500,000		239,500		168,200
Other indebtedness:
Line of credit		—		—		—		—		—		—
Total		$	500,000	197,500		$	209,268	$	500,000	239,500		$	168,200
Unamortized debt issuance costs				(7,010)						(8,587)
Total senior debt, net				$	190,490					$	230,913

The table below shows the scheduled maturity dates of our outstanding debt at December 31, 2020 for each of the years ending December 31:


(in thousands)	Prior Term Loan		Prior ABL Credit Facility		Total
2021	$	2,000	$	—	$	2,000
2022	2,000		—		2,000
2023	2,000		—		2,000
2024	2,000		—		2,000
2025	2,000		—		2,000
Thereafter	187,500		—		187,500
Total senior debt	$	197,500	$	—	$	197,500

On February 17, 2021 in connection with the Merger, we entered into two new credit facilities as described below and issued 6.375% unsecured senior notes as described in Note L, the proceeds of which were used, in part, to prepay in full all outstanding borrowings under the Prior ABL Credit Facility and Prior Term Loan Credit Agreement, fund the Aggregate Cash Consideration upon closing of the Merger to acquire Acima, repay all outstanding indebtedness of Acima and its subsidiaries and pay certain fees and expenses incurred in connection with the Merger. Please reference Note B for discussion of our recent acquisition of Acima.

ABL Credit Agreement

On February 17, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a five-year asset-based revolving credit facility with commitments of $550 million and a letter of credit sublimit of $150 million, which commitments may be increased, at the Company’s option and under certain conditions, by up to an additional $125 million in the aggregate (the “ABL Credit Facility”).

Under the ABL Credit Facility, the Company may borrow only up to the lesser of the level of the then-current borrowing base and the aggregate amount of commitments under the ABL Credit Facility. The borrowing base is tied to the amount of eligible installment sales accounts, inventory and eligible rental contracts, reduced by reserves.

The ABL Credit Facility bears interest at a fluctuating rate determined by reference to the eurodollar rate plus an applicable margin of 1.50% to 2.00%. A commitment fee equal to 0.250% to 0.375% of the unused portion of the ABL Credit Facility fluctuates dependent upon average utilization for the prior month as defined by a pricing grid included in the documentation governing the ABL Credit Facility.

Loans under the ABL Credit Facility may be borrowed, repaid and re-borrowed until February 17, 2026, at which time all amounts borrowed must be repaid. The obligations under the ABL Credit Facility are guaranteed by the Company and certain of its wholly owned domestic restricted subsidiaries, subject to certain exceptions. The obligations under the ABL Credit Facility and such guarantees are secured on a first-priority basis by all of the Company’s and the subsidiary guarantors’ accounts, inventory, deposit accounts, securities accounts, cash and cash equivalents, rental agreements, general intangibles

(other than equity interests in the Company’s subsidiaries), chattel paper, instruments, documents, letter of credit rights, commercial tort claims related to the foregoing and other related assets and all proceeds thereof related to the foregoing, subject to permitted liens and certain exceptions (such assets, collectively, the “ABL Priority Collateral”) and a second-priority basis in substantially all other present and future tangible and intangible personal property of the Company and the subsidiary guarantors, subject to certain exceptions.

The ABL Facility contains covenants that are usual and customary for similar facilities and transactions and that, among other things, restrict the ability of the Company and its restricted subsidiaries to create certain liens and enter into certain sale and lease-back transactions; create, assume, incur or guarantee certain indebtedness; consolidate or merge with, or convey, transfer or lease all or substantially all of the Company’s and its restricted subsidiaries’ assets, to another person; pay dividends or make other distributions on, or repurchase or redeem, the Company’s capital stock or certain other debt; and make other restricted payments.

The ABL Facility also requires the maintenance of a consolidated fixed charge coverage ratio of 1.10 to 1.00 at the end of each fiscal quarter when either (i) certain specified events of default have occurred and are continuing or (ii) availability is less than or equal to the greater of $56.25 million and 15% of the line cap then in effect. These covenants are subject to a number of limitations and exceptions set forth in the documentation governing the ABL Facility.

The documentation governing the ABL Facility provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries.

Term Loan Credit Agreement

On February 17, 2021, we entered into a term loan credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and lenders party thereto, that provides for a seven-year $875 million senior secured term loan facility (the “Term Loan Facility”). Subject in each case to certain restrictions and conditions, the Company may add up to $500 million of incremental term loan facilities to the Term Loan Facility or utilize incremental capacity under the Term Loan Facility at any time by issuing or incurring incremental equivalent term debt.

Interest on borrowings under the Term Loan Facility is payable at a fluctuating rate of interest determined by reference to the eurodollar rate plus an applicable margin of 4.00%, subject to a 0.75% LIBOR floor. Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.000% per annum of the original aggregate principal amount thereof, with the remaining balance due at final maturity.

The Term Loan Facility is secured by a first-priority security interest in substantially all of present and future tangible and intangible personal property of the Company and the subsidiary guarantors, other than the ABL Priority Collateral, and by a second-priority security interest in the ABL Priority Collateral, subject to certain exceptions. The obligations under the Term Loan Facility are guaranteed by the Company and the Company’s material wholly-owned domestic restricted subsidiaries that also guarantee the ABL Credit Facility.

The Term Loan contains covenants that are usual and customary for similar facilities and transactions and that, among other things, restrict the ability of the Company and its restricted subsidiaries to create certain liens and enter into certain sale and lease-back transactions; create, assume, incur or guarantee certain indebtedness; consolidate or merge with, or convey, transfer or lease all or substantially all of the Company’s and its restricted subsidiaries’ assets, to another person; pay dividends or make other distributions on, or repurchase or redeem, the Company’s capital stock or certain other debt; and make other restricted payments. The Term Loan also includes mandatory prepayment requirements related to asset sales (subject to reinvestment), debt incurrence (other than permitted debt) and excess cash flow, subject to certain limitations described therein. Any voluntary prepayment of the Term Loan Facility made using proceeds from a substantially concurrent incurrence of indebtedness and in connection with a repricing transaction in the first six months following the closing date of the Acquisition will be subject to a 1.00% prepayment premium, except that no such prepayment premium will be required in connection with a change of control or a transformative acquisition. These covenants are subject to a number of limitations and exceptions set forth in the documentation governing the Term Loan.

The Term Loan provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries.

The Term Loan Facility was fully drawn at the closing of the Merger to fund a portion of the Aggregate Cash Consideration payable in the Merger, repay certain outstanding indebtedness of the Company and its subsidiaries, repay all outstanding

indebtedness of Acima and its subsidiaries and pay certain fees and expenses incurred in connection with the Merger. A portion of such proceeds were used to repay $197.5 million outstanding under the Prior Term Loan Credit Agreement.