Cash America 2014 Annual Report Download - page 122

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
107
In conjunction with the prepayment of the 2018 Variable Rate Notes during the three months ended June 30,
2014, the Company recorded a loss on early extinguishment of debt of approximately $0.1 million, which is
included in “Loss on early extinguishment of debt” in the consolidated statements of income.
Letter of Credit Facility
When the Company entered into the Credit Agreement, it also entered into an LC Agreement for the
issuance of up to $20.0 million under a Letter of Credit Facility that is guaranteed by the Company’s domestic
subsidiaries and matures on March 31, 2018. In the event that an amount is paid by the issuing bank under a stand-
by letter of credit, it will be due and payable by the Company on demand, and amounts due by the Company under
the LC Agreement will bear interest annually at a rate that is the lesser of (a) 2% above the prime rate for Wells
Fargo Bank, National Association or (b) the maximum rate of interest permissible under applicable laws. The LC
Agreement also requires the Company to pay quarterly fees equal to the applicable margin set forth in the LC
Agreement on the undrawn amount of the credit outstanding. The Company had standby letters of credit of
$12.0 million under its Letter of Credit Facility as of December 31, 2014.
$300.0 Million 5.75% Senior Unsecured Notes
On May 15, 2013, the Company issued and sold the 2018 Senior Notes. The 2018 Senior Notes bear interest
at a rate of 5.75% annually on the principal amount, payable semi-annually in arrears on May 15 and November 15
of each year, beginning on November 15, 2013. The 2018 Senior Notes will mature on May 15, 2018. The 2018
Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act, and
outside the United States pursuant to Regulation S under the Securities Act. As required by a registration rights
agreement that the Company entered into with the initial purchasers when the 2018 Senior Notes were issued, the
Company completed an exchange offer with respect to the 2018 Senior Notes in January 2014. All of the
unregistered 2018 Senior Notes have been exchanged for identical new notes registered under the Securities Act.
In connection with the issuance and registration of the 2018 Senior Notes, the Company incurred debt
issuance and registration costs of approximately $8.8 million, which primarily consisted of underwriting fees, legal
and other professional expenses. These costs are being amortized over a period of five years and are included in
“Other assets” in the consolidated balance sheets.
The 2018 Senior Notes are senior unsecured debt obligations of the Company and are guaranteed by the
Guarantors. The Guarantors have guaranteed fully and unconditionally, on a joint and several basis, the obligations
to pay principal and interest for the 2018 Senior Notes. As of December 31, 2014, the Parent Company, on a stand-
alone unconsolidated basis, had no independent assets or operations, except for an asset representing its retained
shares of Enova (6,568,034 shares) valued at $131.6 million (based on the closing price of Enova common stock on
December 31, 2014). Of the Company’s retained shares of Enova common stock, 5,955,249 shares were transferred
by the Company to a Guarantor subsidiary on February 27, 2015. As of December 31, 2014, the Guarantors
represent all of the subsidiaries of the Company, and all of the Guarantors were 100% owned by the Company. The
domestic Guarantors under the 2018 Senior Notes are also guarantors under the Credit Agreement. The 2018 Senior
Notes Indenture provides that if any of the Guarantors is released from its guarantees of the Company’s borrowings
and obligations under the Credit Agreement, that Guarantor’s guaranty of the 2018 Senior Notes will also be
released.
The 2018 Senior Notes are redeemable at the Company’s option, in whole or in part, at any time at 100% of
the aggregate principal amount of 2018 Senior Notes redeemed plus the applicable “make whole” redemption price
specified in the 2018 Senior Notes Indenture, plus accrued and unpaid interest, if any, to the redemption date. In
addition, if a change of control occurs, as that term is defined in the 2018 Senior Notes Indenture, the holders of
2018 Senior Notes will have the right, subject to certain conditions, to require the Company to repurchase their