CURO Group Holdings Corp. Announces Expiration and Results of Consent Solicitation for its 7.500% Senior 1.5 Lien Secured Notes Due 2028

Rhea-AI Summary

CURO Group Holdings Corp. announced the expiration and results of its consent solicitation from holders of its outstanding 7.500% Senior 1.5 Lien Secured Notes due 2028, obtaining consents from approximately 97% of the aggregate principal amount of the Notes outstanding. The purpose was to waive a potential default and extend the grace period for an interest payment default under the Indenture. The Company, Guarantors, and Trustee executed a supplemental indenture effecting the Proposed Waiver and Amendment.

Financial Analyst

The consent of nearly 97% of holders to the Proposed Waiver and Amendment is a strong indicator of stakeholder confidence in CURO Group Holdings Corp.'s ability to navigate its liquidity challenges. This level of consent suggests that the market participants are willing to accommodate the company's request to adjust the terms of its debt obligations, which is a positive signal for the company's creditworthiness. The waiver regarding the liquidity maintenance and extension of the grace period for interest payment default provides CURO with a critical buffer to manage its finances without the immediate pressure of default.

However, the necessity of such a waiver also points to underlying financial stress within the company. The potential failure to maintain the required liquidity level could indicate operational challenges or a tighter cash flow situation than previously disclosed. This development warrants close monitoring as it may affect the company's future borrowing costs and credit rating. The market will likely scrutinize CURO's upcoming financial statements for signs of improved liquidity management and operational efficiency.

Legal Expert

The execution of the Supplemental Indenture following the consent solicitation process is legally binding on all holders of the notes, regardless of individual consent. This collective action mechanism is typical in bond indentures, allowing a supermajority of bondholders to make decisions that impact all holders. It is important to note that such amendments can significantly alter the rights and expectations of the note holders.

The swift action by CURO and the high consent rate may also reflect effective communication and negotiation strategies with its creditors. From a legal standpoint, the company has successfully navigated the consent solicitation process, which is often complex and subject to strict regulatory compliance requirements. The outcome demonstrates CURO's legal team's ability to effectively manage critical corporate actions under the constraints of the Indenture and applicable securities laws.

Market Research Analyst

The consent solicitation's success reflects not only on CURO's immediate financial maneuverability but also on broader market sentiment towards consumer finance companies. The industry is sensitive to economic cycles and CURO's situation could be symptomatic of larger trends, such as rising interest rates or changing consumer credit behavior. An analysis of the consumer finance sector might reveal similar patterns of strategic debt restructuring, as companies adapt to market conditions.

Investors will be interested in how this amendment may influence CURO's strategic decisions, such as loan origination volumes, risk assessment practices and cost management. Furthermore, the consent solicitation outcome could serve as a benchmark for other firms in similar situations, potentially influencing the terms and success rates of future consent solicitations within the sector.

Holders Consent to Proposed Waiver and Amendment

CHICAGO--(BUSINESS WIRE)-- CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), an omni-channel consumer finance company serving consumers in the U.S. and Canada, today announced the expiration and results of its previously announced consent solicitation (the “Consent Solicitation”) from all registered holders (individually, a “Holder,” and collectively, the “Holders”) of the Company’s outstanding 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “Notes”), issued pursuant to the Indenture, dated as of May 15, 2023 (the “Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “Trustee”).

The purpose of the Consent Solicitation was to obtain the consent of the Holders to (a) waive the potential default under the Indenture arising from the Company’s potential failure to maintain liquidity equal to or greater than $75,000,000 as of January 31, 2024 and (b) extend the grace period for an interest payment default under the Indenture to 30 days (which would include the existing default that has occurred under Section 7.01(a) of the Indenture as a result of the Company’s failure to make the interest payment due under the Indenture on February 1, 2024) (the “Proposed Waiver and Amendment”).

The Consent Solicitation was made pursuant to the terms of and subject to the conditions set forth in the Consent Solicitation Statement, dated February 5, 2024.

The Consent Solicitation expired at 5:00 p.m., New York City time, on February 7, 2024 (the “Expiration Date”). As of the Expiration Date and according to information received by Epiq Corporate Restructuring, LLC, the information agent and tabulation agent in connection with the Consent Solicitation, consents to the Proposed Waiver and Amendment had been provided and not validly revoked by Holders of approximately 97% of the aggregate principal amount of the Notes outstanding. Accordingly, the Company obtained the consents required to effect the Proposed Waiver and Amendment under the terms of the Indenture.

On February 7, 2024 (the “Consent Effective Time”), the Company, the Guarantors and the Trustee executed a supplemental indenture (the “Supplemental Indenture”) effecting the Proposed Waiver and Amendment. The Supplemental Indenture is effective as to all Holders as of the Consent Effective Time, whether or not a Holder delivered a consent prior to the Expiration Date.

This press release is for informational purposes only and is neither an offer to sell nor a solicitation of an offer to buy any security. This announcement is also not a solicitation of consents with respect to the Proposed Waiver and Amendment or otherwise. The Consent Solicitation was made solely through the Consent Solicitation Statement referred to above and related materials. The Consent Solicitation was not made to Holders in any jurisdiction in which the Company was aware that the making of the Consent Solicitation would be unlawful. In any jurisdiction in which applicable law required the Consent Solicitation to be made by a licensed broker or dealer, the Consent Solicitation was deemed to be made on the Company's behalf by the information agent and tabulation agent or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About CURO

CURO Group Holdings Corp. (NYSE: CURO) is a leading consumer credit lender serving U.S. and Canadian customers for over 25 years. Our roots in the consumer finance market run deep. We’ve worked diligently to provide customers a variety of convenient, easily accessible financial services. Our decades of diversified data power a hard-to-replicate underwriting and scoring engine, mitigating risk across the full spectrum of credit products. We operate under a number of brands including Cash Money®, LendDirect®, Heights Finance, Southern Finance, Covington Credit, Quick Credit and First Heritage Credit.

(CURO-NWS)

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Investor Relations:

Email: IR@curo.com

Source: CURO Group Holdings Corp.

What is the ticker symbol for CURO Group Holdings Corp.?

The ticker symbol for CURO Group Holdings Corp. is 'CURO'.

What was the purpose of the Consent Solicitation announced by CURO?

The purpose was to obtain consents from holders of its outstanding 7.500% Senior 1.5 Lien Secured Notes due 2028 to waive a potential default and extend the grace period for an interest payment default under the Indenture.

What percentage of the aggregate principal amount of the Notes outstanding provided consents to the Proposed Waiver and Amendment?

Approximately 97% of the aggregate principal amount of the Notes outstanding provided consents to the Proposed Waiver and Amendment.

What was the outcome of the Consent Solicitation?

The Company obtained the consents required to effect the Proposed Waiver and Amendment under the terms of the Indenture.

What was the effective date of the Supplemental Indenture?

The Supplemental Indenture was effective on February 7, 2024, as of the Consent Effective Time.