Cash America 2011 Annual Report Download - page 137

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
106
Credit Agreement, to increase the amount available by $100.0 million, to $430.0 million (the “Credit Agreement”).
The Credit Agreement consists of a $380.0 million line of credit, which includes the ability to borrow up to $50.0
million in specified foreign currencies or U.S. dollars (the “Domestic and Multi-currency Line”) and matures on March
31, 2015, and a $50.0 million term loan facility (the “2015 Variable Rate Notes”). The line of credit commitment
amount will decrease by $100.0 million, to $280.0 million, on the earlier of May 29, 2013 or the closing of the initial
public offering of common stock of the Company’s wholly-owned subsidiary, Enova International, Inc. if it generates
at least $350.0 million in net proceeds. See Note 22 for further discussion of this transaction. Interest on the Domestic
and Multi-currency Line is charged, at the Company’s option, at either the London Interbank Offered Rate (“LIBOR”)
plus a margin varying from 2.00% to 3.25%, or at the agent’s base rate plus a margin varying from 0.50% to 1.75%.
Interest on the 2015 Variable Rate Notes is charged, at the Company’s option, at either LIBOR plus a margin of
3.50% or at the agent’s base rate plus a margin of 2.00%. The margin for the Domestic and Multi-currency Line is
dependent on the Company’s cash flow leverage ratios as defined in the Credit Agreement. The Company also pays a
fee on the unused portion of the Domestic and Multi-currency Line ranging from 0.25% to 0.50% (0.38% at December
31, 2011) based on the Company’s cash flow leverage ratios. The weighted average interest rate (including margin) on
the Domestic and Multi-currency Line and the 2015 Variable Rate Notes, respectively, was 3.08% and 3.81% at
December 31, 2011. The weighted average interest rate on the Company’s $300.0 million domestic line of credit due
2012 (the “USD Line of Credit”) at December 31, 2010 was 1.73%. Beginning on March 31, 2012, the 2015 Variable
Rate Notes require quarterly principal payments of $2.1 million with any outstanding principal remaining due at
maturity on March 31, 2015.
In conjunction with the entering into the Original Credit Agreement, the Company repaid all outstanding
revolving credit loans under its USD Line of Credit and its variable rate senior unsecured note due 2012 (the “2012
Variable Rate Notes”) with proceeds of the Credit Agreement.
At December 31, 2011, borrowings under the Company’s Domestic and Multi-currency Line consisted of
multiple pricing tranches with maturity dates ranging from three to 31 days, and at December 31, 2010, borrowings
under the Company’s USD Line of Credit consisted of three pricing tranches with maturity dates ranging from four to
31 days. However, the Company routinely refinances borrowings pursuant to the terms of its Domestic and Multi-
currency Line, and it also routinely refinanced borrowings under its USD Line of Credit before it was repaid on March
30, 2011. Therefore, these borrowings are reported as part of the applicable line of credit and as long-term debt.
In connection with the Domestic and Multi-currency Line and the 2015 Variable Rate Notes, the Company
incurred approximately $2.6 million for issuance costs, which primarily consisted of underwriting fees, legal and other
professional expenses. These costs are being amortized over a period of three years and are included in “Other assets”
in the Company’s consolidated balance sheets.
2009 Convertible Notes
On May 19, 2009, the Company completed the offering of $115.0 million aggregate principal amount of
5.25% Convertible Senior Notes due May 15, 2029 (the “2009 Convertible Notes”). The 2009 Convertible Notes are
senior unsecured obligations of the Company. The 2009 Convertible Notes bear interest at a rate of 5.25% per year,
payable semi-annually on May 15 and November 15 of each year. The 2009 Convertible Notes will be convertible, in
certain circumstances, at an initial conversion rate of 39.2157 shares per $1,000 aggregate principal amount of 2009
Convertible Notes (which is equivalent to a conversion price of approximately $25.50 per share), subject to adjustment
upon the occurrence of certain events, into either, at the Company’s election: (i) shares of common stock or (ii) cash up
to their principal amount and shares of its common stock with respect to the remainder, if any, of the conversion value
in excess of the principal amount. The Company may not redeem the 2009 Convertible Notes prior to May 14, 2014.
The Company may, at its option, redeem some or all of the 2009 Convertible Notes on or after May 15, 2014 solely for
cash. Holders of the 2009 Convertible Notes will have the right to require the Company to repurchase some or all of
the outstanding 2009 Convertible Notes, solely for cash, on May 15, 2014, May 15, 2019 and May 15, 2024 at a price
equal to 100% of the principal amount plus any accrued and unpaid interest.