Item 1.01 Entry into a Material Definitive Agreement.
Indenture for 5.625% Senior Notes Due 2030
On December 13, 2021, FirstCash, Inc. (the "Company") closed its previously
announced private offering of $550,000,000 of 5.625% senior notes due 2030 (the
"Notes"), representing an increase of $25 million in aggregate principal amount
from the previously announced proposed offering size. The Notes were sold in a
private placement in reliance on Rule 144A and Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a purchase agreement
between the Company, certain domestic subsidiaries of the Company and Jefferies
LLC, as representative of the several initial purchasers (the "Initial
Purchasers").
The Company intends to use the proceeds from the offering of the Notes to
finance the cash consideration of the previously announced pending acquisition
(the "Acquisition") of American First Finance Inc. ("AFF"), repay in full the
outstanding debt under AFF's credit facility, to pay fees, costs and expenses
incurred in connection with the Acquisition and the offering of the Notes and
the remainder (if any) to repay a portion of the borrowings under the Company's
senior unsecured revolving credit facility. In the event that (i) the
Acquisition is not consummated on or prior to March 31, 2022 (the "Outside
Date") or (ii) the Company notifies BOKF, NA, which is serving as trustee for
the Notes, of its abandonment or termination of the business combination
agreement dated as of October 27, 2021, as amended, by and among the Company,
AFF and the other parties thereto, or its determination that the Acquisition
will not be consummated by the Outside Date, the Notes will be subject to a
special mandatory redemption at a price equal to 100% of the initial issue price
of the Notes plus accrued and unpaid interest from the date of the issuance of
the Notes to, but excluding the date of such special mandatory redemption.
However, the Company has received all required antitrust, regulatory and other
third party approvals for the closing of the Acquisition and, as a result,
expects to close the Acquisition on or around December 17, 2021, subject to the
satisfaction of the other customary closing conditions.
The Notes were issued pursuant to an Indenture (the "Indenture"), dated as of
December 13, 2021, by and among the Company, the guarantors listed therein and
BOKF, NA, as trustee. The Indenture provides that interest on the Notes will
accrue from December 13, 2021 and is payable semiannually in arrears on
January 1 and July 1 of each year, beginning on July 1, 2022, and the Notes
mature on January 1, 2030.
The Company may redeem some or all of the Notes at any time on or after
January 1, 2025, at the redemption prices set forth in the Indenture, plus
accrued and unpaid interest up to, but not including, the redemption date. Prior
to January 1, 2025, the Company may redeem some or all of the Notes at a price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, plus the "make-whole" premium set forth in the Indenture. The Company
may redeem up to 40% of the Notes on or prior to January 1, 2025 with the
proceeds of certain equity offerings at the redemption prices set forth in the
Indenture. If the Company sells certain assets or consummates certain change in
control transactions, the Company will be required to make an offer to
repurchase the Notes.
The Indenture contains certain covenants that, among other things, limit the
Company's ability and the ability of its restricted subsidiaries to incur
additional indebtedness, make certain dividends, repurchase Company stock or
make other distributions, make certain investments, create liens, transfer or
sell assets, merge or consolidate, and enter into transactions with the
Company's affiliates. Such covenants are subject to a number of important
exceptions and qualifications set forth in the Indenture. The Indenture also
contains certain customary events of default, including failure to make payments
in respect of the principal amount of the Notes, failure to make payments of
interest on the Notes when due and payable, failure to comply with certain
covenants and agreements and certain events of bankruptcy or insolvency.
The preceding description of the Indenture and the Notes are summaries and are
qualified in their entirety by the Indenture and the form of Notes, filed as
Exhibit 4.1 hereto, which is incorporated by reference herein.
Fifth Amendment to Amended and Restated Credit Agreement
On December 8, 2021, the Company entered into the Fifth Amendment to Amended and
Restated Credit Agreement (the "2021 Amendment") for its existing U.S. revolving
unsecured credit facility (the "Credit Facility") in order to, among other
things, permit the Acquisition and make certain amendments related to the
Acquisition, including: (i) allow adjustments to Consolidated EBITDA (as defined
in the Credit Facility) for certain expenses which will be incurred in
connection with the Acquisition; (ii) increase certain baskets contained in the
covenants and events of default to account for the increased scale of the
business on a pro forma basis; and (iii) provide for financial covenant relief
needed as a result of the Acquisition.
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The committed amount of the Credit Facility remains at $500 million and the
Credit Facility continues to mature on December 19, 2024 and bear interest at
the Company's option of either (i) the prevailing London Interbank Offered Rate
("LIBOR") (with interest periods of 1 week or 1, 2, 3 or 6 months at the
Company's option) plus a fixed spread of 2.5% or (ii) the prevailing prime or
base rate plus a fixed spread of 1.5%. The Credit Facility provides for a
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above and the full text of the Indenture,
which is attached hereto as Exhibit 4.1, is incorporated by reference into this
Item 2.03.
Item 7.01 Regulation FD.
On December 9, 2021, the Company issued a press release announcing the upsize
and pricing of the Notes. A copy of the press release is filed as Exhibit 99.1
to this report and is incorporated by reference herein.
The Company also announced that it has received all required antitrust,
regulatory and other third party approvals for the closing of the Acquisition.
As a result, the Company expects to close the Acquisition on or about December
17, 2021 and expects to complete its previously announced holding company merger
on December 16, 2021 (the "Holding Company Merger"). The Holding Company Merger
will be effected in accordance with Section 251(g) of the Delaware General
Corporation Law and the Company will become a wholly-owned subsidiary of
FirstCash Holdings, Inc., currently a wholly-owned subsidiary of the Company
("New Parent"). In connection with the Holding Company Merger, each share of
common stock of the Company, par value $0.01 per share, issued and outstanding
immediately prior to the effective time of the Holding Company Merger will be
automatically converted into one validly issued, fully paid and nonassessable
share of common stock of New Parent, par value $0.01 per share ("New Parent
Common Stock"). Following the consummation of the Holding Company Merger, which
is currently anticipated to occur after the market closes on December 16, 2021,
New Parent will assume FirstCash's listing on the Nasdaq Stock Market ("Nasdaq")
and continue to trade under the "FCFS" ticker symbol beginning on December 17,
2021.
Item 8.01 Other Events.
On December 9, 2021, the Company entered into a purchase agreement (the
"Purchase Agreement") with Jefferies LLC as representative of the Initial
Purchasers, relating to the sale by the Company of the Notes. Pursuant to the
terms of the Purchase Agreement, the parties have agreed to indemnify each other
against certain liabilities, including certain liabilities under U.S. securities
laws.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
4.1 Indenture, dated as of December 13, 2021, by and among FirstCash, Inc.,
the guarantors listed therein and BOKF, NA (including the form of Note
attached as an exhibit thereto).
10.1 Fifth Amendment to Amended and Restated Credit Agreement, dated as of
December 8, 2021, by and among FirstCash, Inc., the guarantors and lenders
listed therein and Wells Fargo Bank, National Association.
99.1 Press release, dated December 9, 2021, announcing the upsize and pricing
of the Notes.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document
contained in Exhibit 101)
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