FirstCash has taken its revolver from $700m to $1.055bn, added sterling borrowing and lifted its leverage covenant, and the chief executive says the money is for a British pawnbroker
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The tenth amendment to a credit agreement is not usually where a company tells you what it is about to buy. This one is.
FirstCash Holdings disclosed on Monday morning that on 27 August it amended its unsecured revolving bank facility with Wells Fargo Bank as administrative agent and a syndicate of commercial banks. The total lender commitment goes from $700m to $1.055bn. The maturity moves from 8 August 2029 to 27 August 2031. The unused commitment fee comes down, the negative covenants loosen, and the permitted consolidated net leverage ratio rises to 3.5 times consolidated EBITDA for the full term.
That last number is a ceiling, not a reading. The filing says what the company is now allowed to do and nothing about where its leverage actually sits.
Two English companies on the signature page
The borrowers under the amended facility are FirstCash, Inc., a Delaware company, and two English ones: Chess Holdco Limited, company number 16434482, and Chess Bidco Limited, company number 16434757. The facility now permits drawings in pounds sterling as well as dollars, priced off SONIA rather than SOFR, and the press release attached to the filing puts a sub-limit on the sterling side of $500m equivalent, which is 47.4 percent of the whole facility.
Rick Wessel, the chief executive, says in that release that the amendment facilitates the funding of the expected Ramsdens pawn acquisition in the U.K., which has been approved by Ramsdens' shareholders and is pending final regulatory approval, along with other acquisitions in the pipeline.
The filing gives no price, no completion date and no regulator by name.
What the banks did
Two banks joined the syndicate. The release says most of the existing lenders significantly increased their commitments. The increase itself is $355m, or 50.7 percent on top of the previous $700m, which is a large step up for a facility that stays unsecured.
One small discrepancy is worth flagging, because it will propagate. The press release headline says the committed facility rose to $1.1 billion. The body of the same release, and the 8-K itself, both say $1.055 billion. The agreement figure is the one to use.
FirstCash runs more than 3,300 pawn stores across the United States, Latin America and the United Kingdom, and says pawn accounts for about 90 percent of net revenue. The rest comes from AFF, its point-of-sale payments subsidiary. It sits in the S&P MidCap 400 and the Russell 2000.
