Conn's Financial Moves

Conn’s, Inc. completed a $55 million expansion of its revolving credit facility to $430 million and extended the term by 20 months to July 2015. It estimates that diluted earnings per share will benefit by approximately $0.03 per year as a result of the interest rate changes.

The company also paid the entire balance of its $100 million second lien term loan on July 28, 2011. This allows Conn's to reduce its interest expense by approximately $11.9 million annually and record a pretax charge of approximately $11.0 million due to the payoff, related to the write-off of unamortized original issue discount and deferred financing fees, and the payment of the required prepayment premium.

Conn's also completed an $8 million real estate loan to finance three owned store locations. The real estate loan will mature in July 2016, and requires monthly principal payments based on a 15-year amortization schedule. The interest rate on the loan is the Prime rate plus 100 basis points, with a floor on the total rate of 6%.

After completion of the amendment, repayment of the term loan, and funding of a new $8 million real estate loan, the company hads $290.0 million outstanding under the revolving credit facility, excluding $1.8 million of letters of credit, and has immediate borrowing availability under that facility of approximately $82.4 million.