Rent-A-Center, Inc., the nation’s largest rent-to-own operator, announced the completion of the previously announced refinancing of its senior credit facility. As previously announced, the company formerly anticipated entering into a new $850 million senior credit facility, consisting of a $350 million term loan and a $500 million revolving credit facility. The company entered into a larger, new $900 million senior credit facility, consisting of a $225 million term loan and a $675 million revolving credit facility. With the larger facility, the company expects to access a larger pool of capital while lowering the average cost of indebtedness to the company. The company then drew down the $225 million in term loans and $100 million of the revolving facility and utilized the proceeds to repay its existing senior term debt.
An SEC filing dated Mar. 20 lists JPMorgan Chase Bank as the administrative agent on the Credit Agreement dated Mar. 19 and Bank of America, BBVA Compass Bank, Wells Fargo Bank and SunTrust Bank as syndication agents.
The company expects this refinancing transaction to reduce diluted earnings per share for fiscal 2014 by approximately $0.08 per share.
“We believe the increased liquidity provided by the larger revolving credit facility and moderation of mandatory principal payments over the next seven years will further enhance our financial flexibility as we continue to execute on the strategic initiatives outlined at our recent investor day,” commented Robert D. Davis, the company’s Chief Executive Officer. “In addition, this financial flexibility will allow us to continue to return value to our shareholders through dividend payments and opportunistic share repurchases,” Davis concluded.
Rent-A-Center, Inc., headquartered in Plano, Texas, is the largest rent-to-own operator in North America, focused on improving the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality durable goods such as consumer electronics, appliances, computers, furniture and accessories, under flexible rental purchase agreements with no long-term obligation.
View the SEC filing here.