Item 1.01. Entry into a Material Definitive Agreement.
On August 18, 2020, Regional Management Corp. (the
“Company”) and its
wholly-owned subsidiary, Regional Management Receivables II, LLC
(the “Warehouse
Borrower”), entered into an Omnibus Amendment (the
“Omnibus Amendment”)
to the Amended and Restated Credit Agreement, dated as of
October 17, 2019, by and among the Company, as servicer, the
Warehouse Borrower, the lenders from time to time parties thereto
(the “Lenders”), the
agents from time to time parties thereto, Wells Fargo Bank,
National Association, as account bank, image file custodian, and
backup servicer, Wells Fargo Bank, National Association, as
administrative agent, and Credit Suisse AG, New York Branch, as
structuring and syndication agent (the “Credit Agreement”). The Credit
Agreement provides for $125 million aggregate principal amount of
borrowings with an accordion provision that allows for the
expansion of the facility to $150 million (the “Warehouse Facility”) and is
secured by certain loans that were directly originated by the
Company’s subsidiaries, Regional Finance Corporation of Alabama,
Regional Finance Company of Georgia, LLC, Regional Finance Company
of New Mexico, LLC, Regional Finance Corporation of North Carolina,
Regional Finance Company of Oklahoma, LLC, Regional Finance
Corporation of South Carolina, Regional Finance Corporation of
Tennessee, Regional Finance Corporation of Texas, Regional Finance
Company of Virginia, LLC, Regional Finance Corporation of
Wisconsin, and Regional Finance Company of Missouri, LLC (each, an
“Originator,” and
together, collectively, the “Originators”).
The Omnibus Amendment amends certain defined terms and references
used in the Credit Agreement and certain related transaction
documents to, among other things: (i) permit the Warehouse
Borrower to pledge electronic contracts originated by one or more
of the Originators in connection with the Warehouse Facility,
(ii) acknowledge the execution of an electronic collateral
control agreement and electronic vault services agreement relating
to the electronic contracts to be pledged in connection with the
Warehouse Facility, (iii) amend the receivables eligibility
criteria to permit electronic contracts, as well certain
definitions and mechanics relating to the custody, control, and
inspection related thereto, (iv) make certain changes to the
financial covenants and related definitions to conform to the
Company’s Seventh Amended and Restated Loan and Security Agreement,
dated as of September 20, 2019, among Wells Fargo Bank,
National Association, as the agent and the collateral agent, the
Company and certain of its direct and indirect subsidiaries, as the
borrowers, Bank of America, N.A., as documentation agent, and the
financial institutions named therein, as the lenders, and
(v) amend the financial covenants to include an obligation
that the Company on a consolidated basis maintain unrestricted cash
and unrestricted cash equivalents of not less than
$2 million.
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 under Item 1.01 of this Current Report on
Form 8-K is incorporated by
reference herein.
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