Rogers-based America’s Car-Mart Inc.[1] announced Thursday (Oct. 30) closing on a new five-year, $300 million loan with the money managed by Silver Point Capital L.P.
Car-Mart’s stock fell to a 52-week low on Thursday. The loan announcement was posted after the markets closed. The share price was flat in after-hours trading.
In connection with the new loan, the buy-here, pay-here used car dealer has repaid the balance of its asset-backed line of credit (ABL) to simplify its balance sheet and create a more flexible and scalable asset structure, supporting long-term growth and general corporate purposes, according to a news release.
The new loan term matures Oct. 30, 2030, and has a 7.5% annual interest. In connection with the loan, the company will allow Silver Point Capital to purchase up to 10% of the company’s shares at the existing market price. The share purchase opportunity expires Oct. 30, 2031.
“We are excited to complete this transaction at a time of uncertainty in the market, which we believe demonstrates the fundamental strength of our business and our ability to execute on our long-term capital strategy,” said Douglas Campbell, CEO of America’s Car-Mart. “By replacing our ABL facility with a new term loan, we have strengthened our financial profile and added new capital that will provide flexibility and agility for our originations and operations. This action aligns with our multi-year efforts to improve Car-Mart’s platform by reinforcing our core strengths, adapting to evolving market dynamics, and enhancing our balance sheet.”
Jefferies Finance LLC served as financial adviser, and Mayer Brown served as legal counsel to Car-Mart on this transaction.
“We are pleased to partner with America’s Car-Mart to deliver a customized financing solution that strengthens the company’s capital structure and supports its long-term objectives,” said Taylor Montague, managing director at Silver Point Capital. “We truly appreciate the extensive engagement by the management team over the last several months that enabled us to complete the thorough due diligence that underpins our conviction in the durability of the enterprise and the company’s market position.”
Shares of Car-Mart (NASDAQ: CRMT) closed Thursday at $21.96, down 67 cents or 2.96%. In the past 52 weeks, the stock has ranged between $21.76 and $62.72. The share price dipped to $21.76 on Thursday.
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References
- ^ America’s Car-Mart Inc. (www.car-mart.com)