Rent-A-Center amends revolver maturity, covenants for more flexibility

By Marisa Wong

Morgantown, W.Va., June 6 – Rent-A-Center, Inc. said it closed an amended credit agreement with its existing bank group. The amended credit facility, extended through March 2019, provides the company with additional liquidity and flexibility, according to a press release.

The amended credit facility will replace the existing maintenance covenants with a single fixed-charge coverage test, which requires a minimum level of availability of $50 million if the fixed-charge coverage ratio is less than 1.10 times.

At closing, the company had total borrowings of $70 million and letters of credit and reserves of $101.8 million against the $350 million revolver. This leaves the company with $178.2 million of availability.

The facility includes asset-backed features that govern the size of the available borrowing base, determined by the value of eligible rental agreements and inventory held for rent.

Pricing is substantially the same as the existing agreement, with the addition of a pricing tier when leverage is above 4.00 times.

The revolver includes an expansion feature for an additional $100 million.

The company’s existing term loan B, which currently has $50.3 million outstanding, will remain in place.

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

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