UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 10, 2011
EZCORP, Inc.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
|
Delaware
|
|
0-19424
|
|
74-2540145 |
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer |
|
|
|
|
Identification No.) |
1901 Capital Parkway, Austin, Texas 78746
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (512) 314-3400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 — Entry into a Material Definitive Agreement
On May 10, 2011 (the “Closing Date”), EZCORP, Inc. (as Borrower) and certain of its domestic
subsidiaries (as Guarantors) entered into a Credit Agreement with a syndicate of lenders and Wells
Fargo Bank, National Association, as Administrative Agent, and BBVA Compass Bank, as Syndication
Agent. The Credit Agreement provides for a senior secured revolving credit facility in an
aggregate principal amount of $175 million, including a $5 million sublimit for the issuance of
standby letters of credit and a $15 million sublimit for swingline loans, all subject to various
terms and conditions contained in the Credit Agreement. Under the terms of the Credit Agreement, we may request that the revolving line of credit be increased to a total of $225 million. A copy of the Credit Agreement is attached
as Exhibit 10.1 to this report. Terms not otherwise defined herein have the meaning given to them
in the Credit Agreement.
The new revolving credit facility replaces our previous credit facilities, which consisted of an
$80 million revolving credit facility expiring December 31, 2011 and a $40 million term loan
maturing December 31, 2012. See “Item 1.02 — Termination of a Material Definitive Agreement”
below. There were no amounts outstanding under the previous revolving credit facility on the
Closing Date. The amount outstanding on the previous term loan ($17.5 million plus accrued interest) was prepaid from cash on hand, and the
outstanding letters of credit totaling $5 million were refinanced under the new revolving credit
facility, leaving $170 million available on the new revolving credit facility as of the Closing
Date.
Proceeds of the new revolving credit facility will be used to refinance the outstanding letters of credit under the
previous credit facilities (as described above); to pay costs, fees and expenses associated with
the new facility; and for working capital and other general corporate purposes, including permitted
investments and acquisitions. The new facility will be available on a revolving basis from and
after the Closing Date until May 10, 2015.
Borrowings under the new facility bear interest annually at a rate equal to, at our
choosing, either LIBOR (for one, two, three, six, nine or, subject to lender approval, twelve months) or the Alternate Base
Rate, plus, in each case, a specified margin depending on our Total Leverage Ratio. The Credit
Agreement defines Alternate Base Rate as the greatest of (a) the Administrative Agent’s prime rate,
(b) the federal funds effective rate plus 1/2 of 1% and (c) one month LIBOR plus 1%. We will also
pay a quarterly commitment fee equal to 0.50% or 0.375% (depending on our Total Leverage Ratio) of
the average daily unused amount of the revolving credit commitments.
Borrowings under the new facility are secured by first priority security interests in and liens on
(a) substantially all of the tangible and intangible personal property and assets of EZCORP and
its domestic subsidiaries and (b) all equity interests in EZCORP’s domestic subsidiaries and up to
65% of the voting stock of all first-tier foreign subsidiaries.
The Credit Agreement contains affirmative and negative covenants customary for financings of this
type, including limitations on certain indebtedness, liens, acquisitions and other investments,
fundamental changes, asset dispositions and dividends and other distributions. The Credit
Agreement also contains restrictive covenants regarding Total Leverage Ratio, Fixed Charge Coverage
Ratio and minimum Net Worth, as well as customary events
of default.
The foregoing includes a description of the material terms and conditions of the Credit Agreement,
and is qualified in its entirety by the complete terms and conditions of the Credit Agreement,
which is incorporated herein by reference.
Item 1.02 — Termination of a Material Definitive Agreement
As described under “Item 1.01 — Entry into a Material Definitive Agreement” above, the Fifth
Amended and Restated Credit Agreement, dated December 31, 2008, among EZCORP, Wells Fargo
Bank, National Association, as Administrative Agent and Issuing Bank, Union Bank of California,
N.A., as Syndication Agent, and other banks party thereto, was terminated on the Closing Date and
replaced by the new Credit Agreement described above.
2