Cash America 2014 Annual Report Download - page 124

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
109
Private Placement Notes
On May 9, 2014, the Company and its domestic subsidiaries, as guarantors, entered into the Waiver and
Amendment with respect to the Private Placement Notes, which provided for the release of Enova and its
subsidiaries as guarantors of the Private Placement Notes upon completion of the issuance of debt by Enova. The
Waiver and Amendment also required the Company to prepay the entire outstanding balance of Private Placement
Notes, including any applicable make-whole premium, with proceeds received from Enova for repayment of
amounts owed by Enova to the Company under the Enova Note Receivable and payment of a dividend by Enova to
the Company. The Company completed the prepayment of the Private Placement Notes in June 2014, which
included an aggregate principal repayment of $106.2 million and a make-whole premium of $14.3 million.
Additionally, in conjunction with this prepayment, the Company recorded a $0.6 million expense to write-off
remaining deferred financing costs associated with the Private Placement Notes. The expenses for the make-whole
premium and the write-off of the deferred financing costs totaling $14.9 million are included in “Loss on early
extinguishment of debt” in the consolidated statements of income.
Debt Agreement Compliance
The debt agreements for the Domestic and Multi-currency Line of Credit and the 2018 Senior Notes require
the Company to maintain certain financial ratios. As of December 31, 2014, the Company believes it was in
compliance with all covenants or other requirements set forth in the debt agreements.
Representatives of a small number of holders of the 2018 Senior Notes, which the Company believes own
less than a majority of the aggregate principal amount of the 2018 Senior Notes, have indicated that they believe the
Enova Spin-off was not permitted by the 2018 Senior Notes Indenture. These noteholders have taken the position
that the Company is in default under the Indenture and that a make-whole premium is payable, in addition to
principal and accrued interest. The Company disagrees with the assertion that a default exists under the 2018 Senior
Notes Indenture and also disagrees that a make-whole premium would be due in the event of a default because,
among other things, the 2018 Senior Notes Indenture provides that upon acceleration of the 2018 Senior Notes due
to a default, the repayment remedy is the repayment of principal and accrued interest with no provision for a make-
whole premium. The Company believes the position taken by these noteholders is without merit and the Company
intends to vigorously defend its position on these issues if formally asserted. As of December 31, 2014, the
Company had ample liquidity and capital resources, including availability under the Company’s Domestic and
Multi-Currency Line of Credit, to repay the 2018 Senior Notes regardless of the outcome of this claim.
For each of the five years after December 31, 2014, required principal payments under the terms of the
long-term debt, including the Company’s Domestic and Multi-currency Line of Credit, are as follows (dollars in
thousands):
Year Amount
2015 $
—
2016
—
2017
—
2018 196,470
2019
—
$196,470