Rent-A-Center gets temporary waivers for financial covenant provisions

By Tali Rackner

Minneapolis, May 2 – Rent-A-Center, Inc. entered into a third amendment and waiver with JPMorgan Chase Bank, NA, as administrative agent pursuant to which the lenders agreed to waive compliance with certain provisions in the credit agreement dated March 19, 2014, according to an 8-K filing with the Securities and Exchange Commission.

The Monday waivers allow the company to exceed the maximum fixed charge coverage ratio and total leverage ratio covenants for the quarter ending March 31. The waivers expire on June 30.

In addition, the maximum consolidated senior secured leverage ratio was revised to 2.75 times before Dec. 31, 2016; to 2.5 times at Dec. 31, 2016; and to 2 times at March 31 and thereafter.

Also, at any time during a reference quarter, the company may raise the minimum consolidated fixed-charge coverage ratio covenant level to 1.75 times.

Rent-A-Center is a rent-to-own operator based in Plano, Texas.

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