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| Item 1.01. | Entry into a Material Definitive Agreement. |
Ninth Amendment to Amended and Restated Revolving Credit Facility
On November 23, 2022, World Acceptance Corporation (the “Company”) entered into the Ninth Amendment to its Amended and Restated Revolving Credit Agreement (the “Ninth Amendment”), among the Company, the lenders named therein, and Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent. The Ninth Amendment amends the Company's Amended and Restated Revolving Credit Agreement to, among other things:
Decrease the Advance Rate to as low as 62% from 74% for the calendar months ending October 31, 2022 through June 30, 2023 as Collateral Performance Indicator exceeds 24%.
Decrease the required ratio for Net Income Available for Fixed Charges to Fixed Charges to:
i.1.25 to 1.0 for the fiscal quarter ending December 31, 2022;
ii.1.15 to 1.0 for the fiscal quarters ending March 31, 2023 and June 30, 2023;
iii.1.50 to 1.0 for the fiscal quarter September 30, 2023;
iv.2.0 to 1.0 for the fiscal quarter ending December 31, 2023, and
v.2.75 to 1.0 for each fiscal quarter thereafter
The Ninth Amendment further requires the above referenced ratio for the most recent four consecutive fiscal quarters to be at least 2.0 to 1.0 in order for the Company to declare dividends or purchase any class or series of its capital stock or other equity.
Change the aggregate Total Debt as a percentage of Consolidated Adjusted Net Worth to the following limits:
i.250% for the fiscal quarter ending December 31, 2022,
ii.225% for the fiscal quarters ending March 31, 2023 and June 30, 2023,
iii.200% for the fiscal quarter ending September 30, 2023,
iv.225% for the fiscal quarter ending December 31, 2023 and
v.250% for each fiscal quarter thereafter
Require a Collateral Performance Indicator of less than or equal to 28% for the calendar months ending October 31, 2022 through June 30, 2023 and 26% thereafter.
Add definitions and clarifications for requirements regarding Electronic Chattel Paper, Electronic Contracts and related items.
The foregoing description of the Ninth Amendment is only a summary and is qualified in its entirety by reference to the full text of the Ninth Amendment and the Amended and Restated Revolving Credit Agreement, which are filed as Exhibit 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference.