| Item 1.01. | Entry into a Material Definitive Agreement. |
On January 31, 2023, affiliates of America’s Car-Mart, Inc.
(the “Company”) completed a securitization transaction (the “Securitization Transaction”), which involved the
issuance and sale in a private offering of $230,390,000 aggregate principal amount of 6.61% Class A Asset Backed Notes (the “Class
A Notes”), $46,800,000 aggregate principal amount of 7.26% Class B Asset Backed Notes (the “Class B Notes”), $74,100,000
aggregate principal amount of 8.59% Class C Asset Backed Notes (the “Class C Notes”), and $48,900,000 aggregate principal
amount of 12.58% Class D Asset Backed Notes (the “Class D Notes” and, together with the Class A Notes, the Class B Notes,
and the Class C Notes, the “Notes”). The Notes were issued by ACM Auto Trust 2023-1 (the “Issuer”), an indirect
subsidiary of the Company. The Notes are collateralized by loans directly originated by the Company’s operating subsidiaries, America’s
Car Mart, Inc. and Texas Car-Mart, Inc. The Issuer will be the sole obligor of the Notes; the Notes will not be obligations of or guaranteed
by the Company or any of its other affiliates or subsidiaries. Net proceeds from the offering (after deducting the underwriting discount
payable to the initial purchasers and other expenses) were approximately $398.2 million and are being used to pay outstanding debt and
make the initial deposits into collection and reserve accounts for the benefit of noteholders.
S&P Global Rating Agency has rated the Notes as follows: Class A
Notes, A (sf); Class B Notes, A- (sf); Class C Notes, BBB (sf); and Class D Notes, BB (sf).
Kroll Bond Rating Agency has rated the Notes as follows: Class A Notes,
AA- (sf); Class B Notes, A- (sf); Class C Notes, BBB- (sf); and Class D Notes, BB- (sf).
To execute the Securitization Transaction, Colonial Auto Finance, Inc.,
a wholly-owned subsidiary of the Company (the “Seller”), sold or conveyed certain customer receivable contracts (the “Receivables”)
(loans made to finance customer purchases of used vehicles from the Company’s subsidiaries) to ACM Funding, LLC, an indirect wholly-owned
subsidiary of the Company (the “Depositor”), pursuant to a Purchase Agreement, dated as of January 31, 2023, by and between
the Seller and the Depositor (the “Purchase Agreement”). The Receivables were then sold by the Depositor to the Issuer pursuant
to a Sale and Servicing Agreement, dated January 31, 2023, by and between the Depositor, the Issuer, America’s Car Mart, Inc., as
servicer (the “Servicer”), and Wilmington Trust, National Association, as trustee (the “Trustee”) (the “Sale
and Servicing Agreement”). Under the Sale and Servicing Agreement, the Servicer is responsible for servicing the Receivables and
the Servicer will receive a monthly service fee equal to 4.00% (annualized) based on the outstanding principal balance of the Receivables.
If the Servicer defaults on its obligations under the Sale and Servicing Agreement, it may, and under certain circumstances, will be terminated
and replaced as servicer.
The Notes were issued pursuant to an Indenture, dated January 31, 2023,
by and between the Issuer and the Trustee (the “Indenture”). The Issuer will pay interest and principal on the Notes monthly
on the 20th day of each month (or, if that day is not a business day, on the next business day), starting on February 21, 2023. The Notes
mature on January 22, 2030.
The Notes were sold initially to Credit Suisse Securities (USA) LLC and
BMO Capital Markets Corp., as initial purchasers, and then reoffered and resold only to “Qualified Institutional Buyers” as
defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended, in transactions meeting the requirements
of Rule 144A.
Credit enhancement for the Notes will consist of over-collateralization,
a reserve account funded with an initial amount of not less than 2.00% of the pool balance as of the cut-off date, excess interest on
the Receivables, and, in the case of the Class A Notes, the Class B Notes and the Class C Notes, the subordination of certain payments
to the noteholders of less senior classes of notes.
The Servicer will have the right at its option to purchase (and/or designate
one or more other persons to purchase) the Receivables and the other issuing entity property (other than the reserve account) from the
issuing entity on any payment date if both of the following conditions are satisfied: (a) as of the last day of the related collection
period, the Note balance has declined to 10% or less of the Note balance as of January 31, 2023, and (b) the sum of the purchase price
(as described below) and the available funds for such payment date would be sufficient to pay the sum of (i) the servicing fee for such
payment date and all unpaid servicing fees for prior periods, (ii) all fees, expenses and indemnities owed to the Trustee, the owner trustee,
the backup servicer, the certificate registrar, the paying agent and the calculation agent and not previously paid (without giving effect
to any caps), (iii) interest then due on the outstanding Notes and (iv) the aggregate unpaid Note balance of all of the outstanding Notes
. If the Servicer (or its designee) purchases the Receivables and other Issuer property (other than the reserve account), the purchase
price will equal the greater of (a) the unpaid principal amount of all of the outstanding Notes, plus accrued and unpaid interest on the
outstanding Notes at the applicable interest rate up to but excluding that payment date (after giving effect to all distributions to be
made on that payment date) and (b) the pool balance.
If certain events of default were to occur under the Indenture, the Trustee
may, and at the direction of the required noteholders, shall cause the unpaid principal amount of all of the Notes outstanding, together
with accrued and unpaid interest thereon, to be immediately due and payable. Events of default under the Indenture include, but are not
limited to, events such as failure to make required payments on the Notes or specified bankruptcy-related events. If an event of default
related to specified bankruptcy-related events were to occur under the Indenture, all unpaid principal of and accrued and unpaid interest,
if applicable, on all the Notes outstanding shall become and be immediately due and payable without any declaration or other act on the
part of the Trustee or any noteholder.
The foregoing descriptions of the Indenture, the Purchase Agreement, and
the Sale and Servicing Agreement do not purport to be complete and are qualified in their entirety by reference to such documents, which
are filed as Exhibits 4.1, 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.