CURO Group enters agreement for $150 million first lien term loans

By Wendy Van Sickle

Columbus, Ohio, May 16 – CURO Group Holdings Corp. entered into a first-lien credit agreement on May 15 under which holders of its 7˝% senior secured notes due 2028 extended $150 million of term loans to the company, according to an 8-K filing with the Securities and Exchange Commission.

The term loans are senior secured obligations of the company and rank effectively senior in right of payment to all of its existing and future unsecured senior debt.

The term loans are guaranteed by each of the company’s existing and future domestic subsidiaries, other than CURO SPV, that are not receivables financing entities. The loans are secured by first priority liens on substantially all of the company’s and the guarantors’ assets.

Alter Domus (US) LLC is the administrative agent and collateral agent.

The loans will mature on Aug. 2, 2027 and will accrue interest at a rate of 18% per annum with up to 12% payable in kind in the first year after closing and 9% payable in kind thereafter.

Proceeds will be used to repay in full the prior credit agreement, for general corporate purposes and for payment of fees and expenses.

The credit agreement includes some financial and operating covenants, including covenants requiring the company to maintain liquidity as of the last day of each calendar month of prior to Sept. 30, 2024, equal to or greater than $75 million and thereafter at least $60 million and to maintain a minimum adjusted pre-tax income for each four-fiscal-quarter period, beginning with the period ending on March 31, 2024.

Of the total principal amount of the term loan, $16.38 million was funded by Curo SPV, LLC, a wholly owned special purpose vehicle of the company, using proceeds from a concurrent private placement issuance of 18% senior secured notes. The company’s guarantee of these backstop noes is subordinate to its obligations as borrower under the term loans.

The backstop notes will mature on the same date as the term loans and may be paid in cash or in kind consistent with the term loans.

On the closing date, noteholders agreed to exchange $682,298,000 aggregate principal amount, or about 68.2%, of the company’s existing 7˝% senior secured notes due 2028 for a like principal amount of new 7˝% senior 1.5-lien secured notes due 2028.

CURO supplies financial products to non-prime U.S. consumers and prime- as well as non-prime Canadian consumers.

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