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Note F - Debt
 12 Months Ended
Apr. 30, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

F - Debt

 

A summary of debt is as follows:

 

(In thousands)

 

2023

  

2022

 
         

Revolving line of credit

 $168,516  $46,674 

Debt issuance costs

  (1,285)  (2,004)
         

Revolving line of credit, net

 $167,231  $44,670 
         

Non-recourse notes payable - 2022 Issuance

 $134,137  $399,994 

Non-recourse notes payable - 2023 Issuance

  338,777    

Debt issuance costs

  (1,547)  (4,008)
         

Non-recourse notes payable, net

 $471,367  $395,986 
         

Total debt

 $638,598  $440,656 

 

Revolving Line of Credit

 

At April 30, 2023, the Company and its subsidiaries have $600.0 million of permitted borrowings under a revolving line of credit. The revolving credit facilities are collateralized primarily by finance receivables and inventory, are cross collateralized and contain a guarantee by the Company. Interest is payable monthly under the revolving credit facilities with a scheduled maturity date of September 29, 2024. The credit facilities provide for four pricing tiers for determining the applicable interest rate, based on the Company’s consolidated leverage ratio for the preceding fiscal quarter. The current applicable interest rate under the credit facilities is generally SOFR plus 2.75%, with a minimum of 2.25% or for non-SOFR amounts the base rate of 8.25% at April 30, 2023 and 2.85% at April 30, 2022. The credit facilities contain various reporting and performance covenants including (i) maintenance of certain financial ratios and tests, (ii) limitations on borrowings from other sources, (iii) restrictions on certain operating activities and (iv) restrictions on the payment of dividends or distributions (see note B).

 

The Company was in compliance with the covenants at April 30, 2023. The amount available to be drawn under the credit facilities is a function of eligible finance receivables and inventory; based upon eligible finance receivables and inventory at April 30, 2023, the Company had additional availability of approximately $121.4 million under the revolving credit facilities.

 

Non-Recourse Notes Payable

 

The Company has issued two separate series of asset-backed non-recourse notes (known as the “2022 Issuance” and the “2023 Issuance”). The 2022 Issuance consists of $400.0 million in principal amount of non-recourse asset-back notes issued in four classes with a weighted average fixed coupon rate of 5.14% per annum, and the 2023 Issuance consists of $400.2 million in principal amount of non-recourse asset-back notes issued in four classes with a weighted average fixed coupon rate of 8.68% per annum. Both issuances are collateralized by auto loans directly originated by the Company. Credit enhancement for the non-recourse notes payable consists of overcollateralization, a reserve account funded with an initial amount of not less than 2.0% of the pool balance, excess interest on the auto finance receivables, and in some cases, the subordination of certain payments to noteholders of less senior classes of notes. The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto finance receivables. Notes payable related to the term securitization transactions accrue interest predominately at fixed rates have scheduled maturities through April 20, 2029 and January 22, 2030, respectively, but may mature earlier, depending upon repayment rate of the underlying auto finance receivables. See Note B for additional information.