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Note 9 - Notes Payable | 9 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Debt Disclosure [Text Block] |
9. | Notes Payable
Notes Payable, at Face Value Other notes payable outstanding as of September 30, 2023 and December 31, 2022 that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:
|  | As of |
|  | September 30, 2023 |  |  | December 31, 2022 |
Revolving credit facilities at a weighted average interest rate equal to 6.1% as of September 30, 2023 (5.1% as of December 31, 2022) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $2,159.8 million as of September 30, 2023 ($1,856.2 million as of December 31, 2022) |  |  |  |  |  |  |  |
Revolving credit facility, not to exceed $65.0 million (expiring November 1, 2025) (1) (2) (3) |  | $ | 45.3 |  |  | $ | 44.1 |
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2024) (2) (3) (4) (5) |  |  | 47.9 |  |  |  | 50.0 |
Revolving credit facility, not to exceed $100.0 million (expiring March 15, 2024) (2) (3) (4) (5) (6) |  |  | — |  |  |  | — |
Revolving credit facility, not to exceed $50.0 million (expiring July 20, 2025) (2) (3) (4) (5) |  |  | 28.9 |  |  |  | 24.6 |
Revolving credit facility, not to exceed $20.0 million (expiring December 11, 2023) (2) (3) (4) (5) |  |  | 18.5 |  |  |  | 11.1 |
Revolving credit facility, not to exceed $200.0 million (paid off in September 2023) |  |  | — |  |  |  | 188.9 |
Revolving credit facility, not to exceed $88.9 million (expiring January 15, 2025) (3) (4) (5) (6) |  |  | 88.9 |  |  |  | 100.0 |
Revolving credit facility, not to exceed $250.0 million (expiring October 15, 2025) (3) (4) (5) (6) |  |  | 250.0 |  |  |  | 250.0 |
Revolving credit facility, not to exceed $35.0 million (expiring July 31, 2026) (2) (3) (4) (5) |  |  | 35.0 |  |  |  | 25.0 |
Revolving credit facility, not to exceed $300.0 million (expiring December 15, 2026) (3) (4) (5) (6) |  |  | 300.0 |  |  |  | 300.0 |
Revolving credit facility, not to exceed $75.0 million (expiring September 1, 2025) (2) (3) (4) (5) (6) |  |  | — |  |  |  | — |
Revolving credit facility, not to exceed $300.0 million (expiring May 15, 2026) (3) (4) (5) (6) |  |  | 300.0 |  |  |  | 300.0 |
Revolving credit facility, not to exceed $250.0 million (expiring January 15, 2029) (3) (4) (5) (6) |  | 250.0 |  |  |  | 250.0 |
Revolving credit facility, not to exceed $100.0 million (expiring August 5, 2024) (3) (4) (5) (6) |  |  | — |  |  |  | — |
Revolving credit facility, not to exceed $100.0 million (expiring March 15, 2027) (3) (4) (5) (6) |  |  | 100.0 |  |  |  | 100.0 |
Revolving credit facility, not to exceed $20.0 million (expiring May 26, 2026) (3) (4) (5) |  |  | 20.0 |  |  |  | — |
Revolving credit facility, not to exceed $300.0 million (expiring February 15, 2028) (3) (4) (5) (6) |  |  | 300.0 |  |  |  | — |
Other facilities |  |  |  |  |  |  |  |
Other debt |  |  | 5.7 |  |  |  | 5.8 |
Unsecured term debt (expiring August 26, 2024) with a weighted average interest rate equal to 8.0% (3) |  |  | 17.4 |  |  |  | 17.4 |
Total notes payable before unamortized debt issuance costs and discounts |  |  | 1,807.6 |  |  |  | 1,666.9 |
Unamortized debt issuance costs and discounts |  |  | (19.5 | ) |  |  | (13.6 | )
Total notes payable outstanding, net |  | $ | 1,788.1 |  |  | $ | 1,653.3 |
(1) | Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.
(2) | These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.
(3) | See below for additional information.
(4) | Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.
(5) | Loans are associated with VIEs. See Note 7, "Variable Interest Entities" for more information.
(6) | Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.
* | As of September 30, 2023, the Prime Rate was 8.50% and the Secured Overnight Financing Rate ("SOFR") was 5.31%.
In October 2015, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $50.0 million revolving borrowing limit that can be drawn to the extent of outstanding eligible principal receivables (of which $47.9 million was drawn as of September 30, 2023). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to SOFR plus 3.0%. The facility matures on October 30, 2024 and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The facility is guaranteed by Atlanticus, which is required to maintain certain minimum liquidity levels. In October 2016, we (through a wholly owned subsidiary) entered a revolving credit facility available to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which $45.3 million was drawn as of September 30, 2023). This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to SOFR plus a range between 2.25% and 2.6% based on certain ratios. The loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. In periods subsequent to October 2016, we amended the original agreement to either extend the maturity date and/or expand the capacity of this revolving credit facility. As of September 30, 2023, the facility's borrowing limit was $65.0 million and the facility matures on November 1, 2025. There were no other material changes to the existing terms or conditions as a result of these amendments and the new maturity date and borrowing limit are reflected in the table above. In December 2017, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $50.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $28.9 million was drawn as of September 30, 2023). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to Term Secured Overnight Financing Rate ("Term SOFR") plus 3.6%. An amendment was completed in July 2023 that extended the maturity to July 20, 2025. There were no other material changes to the existing terms. The facility is subject to certain affirmative covenants, including payment, delinquency and charge-off tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus. In 2018, we (through a wholly owned subsidiary) entered a revolving credit facility to sell up to an aggregate $100.0 million of notes that are secured by the receivables and other assets of the trust (of which $0.0 million was outstanding as of September 30, 2023) that can be drawn upon to the extent of outstanding eligible receivables. The interest rate on the notes equals the SOFR plus 3.1%. The facility matures on March 15, 2024, and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. As of September 30, 2023, the aggregate borrowing limit was $100.0 million. In June 2019, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $20.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $18.5 million was drawn as of September 30, 2023). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the Prime Rate. The facility matures on December 11, 2023. The note is guaranteed by Atlanticus. In August 2019, Atlanticus Holdings Corporation issued a $17.4 million term note, which bears interest at a fixed rate of 8.0% and is due in August 2024. In November 2019, we (through a wholly owned subsidiary) sold $200.0 million of ABS secured by certain credit card receivables. The terms of the ABS allowed for a three-year revolving structure with a subsequent 12-month to 18-month amortization period. The weighted average interest rate on the securities was fixed at 4.91%. This facility was paid off in September 2023. In July 2020, we (through a wholly owned subsidiary) sold $100.0 million of ABS secured by certain private label credit receivables. A portion of the proceeds from the sale were used to pay down some of our existing revolving facilities associated with our private label credit receivables, and the remaining proceeds were used to fund the acquisition of receivables. The terms of the ABS allow for a three-year revolving structure with a subsequent 18-month amortization period and expires January 15, 2025. The weighted average interest rate on the securities is fixed at 5.47%. This facility is currently in contractually scheduled amortization. In October 2020, we (through a wholly owned subsidiary) sold $250.0 million of ABS secured by certain private label credit receivables. A portion of the proceeds from the sale was used to pay down our existing term ABS associated with our private label credit receivables, noted above, and the remaining proceeds were used to fund the acquisition of receivables. The terms of the ABS allow for a 41-month revolving structure with an 18-month amortization period, and the securities mature between August 2025 and October 2025. The weighted average interest rate on the securities is fixed at 4.1%. In January 2021, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $35.0 million borrowing limit (of which $35.0 million was drawn as of September 30, 2023) that is available to the extent of outstanding eligible principal receivables. This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the greater of the Prime Rate or 4%. The facility matures on July 31, 2026 and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus, which is required to maintain certain minimum liquidity levels. In June 2021, we (through a wholly owned subsidiary) sold $300.0 million of ABS secured by certain credit card receivables (expiring May 15, 2026 through December 15, 2026). The terms of the ABS allow for a four-year revolving structure with a subsequent 11-month to 18-month amortization period. The weighted average interest rate on the securities is fixed at 4.24%. In September 2021, we (through a wholly owned subsidiary) entered a term facility with a $75.0 million limit (of which $0.0 million was outstanding as of September 30, 2023) that is available to the extent of outstanding eligible principal receivables. This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to Term SOFR plus 2.75%. The terms of the facility allow for a 24-month revolving structure with an 18-month amortization period and the facility matures in (as subsequently amended) September 2025. In November 2021, we (through a wholly owned subsidiary) sold $300.0 million of ABS secured by certain credit card receivables (expiring May 15, 2026). The terms of the ABS allow for a three-year revolving structure with a subsequent 18-month amortization period. The weighted average interest rate on the securities is fixed at 3.53%. In May 2022, we (through a wholly owned subsidiary) entered a $250.0 million ABS agreement (of which $250.0 million was drawn as of September 30, 2023) secured by certain credit card receivables (expiring January 15, 2029). The terms of the ABS allow for a five-year revolving structure with a subsequent 18-month amortization period. The weighted average interest rate on the securities is fixed at 6.33%. In August 2022, we (through a wholly owned subsidiary) entered a $100.0 million ABS agreement secured by certain credit card receivables (of which $0.0 million was outstanding as of September 30, 2023) that can be drawn upon to the extent of outstanding eligible receivables. The interest rate on the notes is based on the Term SOFR plus 1.8%. The facility matures on August 5, 2024. In September 2022, we (through a wholly owned subsidiary) sold $100.0 million of ABS secured by certain private label credit receivables (expiring March 15, 2027). A portion of the proceeds from the sale was used to pay down other revolving facilities associated with our private label credit receivables, noted above, and the remaining proceeds have been invested in the acquisition of receivables. The terms of the ABS allow for a 3-year revolving structure with an 18-month amortization period. The weighted average interest rate on the securities is fixed at 7.3%. In May 2023, we (through a wholly owned subsidiary) entered a revolving credit facility with a $20.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $20.0 million was drawn as of September 30, 2023). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the Term SOFR plus 3.75%. The facility matures on May 26, 2026 and is subject to certain covenants and restrictions of which the failure could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus. In September 2023, we (through a wholly owned subsidiary) sold $300.0 million of ABS secured by certain credit card receivables (expiring February 15, 2028). A portion of the proceeds from the sale was used to pay down other facilities associated with our credit card receivables, noted above, and the remaining proceeds have been invested in the acquisition of receivables. The terms of the ABS allow for a three-year revolving structure with a subsequent 18-month amortization period. The weighted average interest rate on the securities is fixed at 9.51%. As of September 30, 2023, we were in compliance with the covenants underlying our various notes payable and credit facilities. Senior Notes, net In November 2021, we issued $150.0 million aggregate principal amount of senior notes (included on our consolidated balance sheet as "Senior notes, net"). The senior notes are general unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness, and will rank senior in right of payment to the Company’s future subordinated indebtedness, if any. The senior notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and the senior notes are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (excluding any amounts owed by such subsidiaries to the Company). The senior notes bear interest at the rate of 6.125% per annum. Interest on the senior notes is payable quarterly in arrears on February 1, May 1, August 1 and November 1 of each year. The senior notes will mature on November 30, 2026. We are amortizing fees associated with the issuance of the senior notes into interest expense over the expected life of the notes. Amortization of these fees for the three and nine months ended September 30, 2023 and 2022 totaled $0.4 million, $1.1 million, $0.4 million and $1.1 million, respectively. We repurchased $322,000 and $1,108,000 of the outstanding principal amount of these senior notes for the three and nine months ended September 30, 2023, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
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