CURO Group Holdings Corp. Enters Forbearance Agreement Amendments and Waiver Amendment to Allow for Continued Constructive Discussions with Lenders and Stakeholders

Rhea-AI Summary

CURO Group Holdings Corp. announces extension of forbearance agreements and waiver amendment with lenders until March 25, 2024, to address default events under credit agreements.

Insights

Financial Analyst

The extension of the forbearance agreements and the waiver amendment signifies a important juncture for CURO Group Holdings Corp., as it reflects the company's current liquidity and solvency challenges. The agreement by the lenders to refrain from exercising remedies until March 25, 2024, provides CURO with a temporary reprieve, allowing the company to potentially restructure its debts, seek refinancing options, or improve its operational performance to meet its obligations. This development is particularly significant for investors and creditors, as it may influence the company's credit rating and the value of its bonds. The identical 7.500% interest rate on both the Senior 1.5 Lien Secured Notes and Senior Secured Notes underscores the high-yield nature of these debt instruments, often associated with higher risk and potential for default.

Stakeholders should monitor CURO's subsequent financial statements and management discussion for insights into the company's turnaround strategy and operational efficiency improvements. The forbearance period could be a double-edged sword, providing necessary breathing room but potentially leading to further financial strain if the underlying issues are not adequately addressed. Investors may also consider the broader implications for the consumer finance sector, where companies often face high default risks and regulatory challenges.

Legal Expert

The legal implications of the Amendments to the Forbearance Agreements and the Waiver Amendment are substantial. Forbearance agreements are typically negotiated when a borrower is experiencing financial distress but the creditors believe there is a reasonable prospect of recovery. The terms and conditions attached to such agreements are critical as they often include covenants or milestones the borrower must achieve. Failure to meet these can lead to acceleration of debt repayment or enforcement of security interests.

For CURO and its affiliates, the extension until March 25, 2024, provides a shield against immediate legal actions such as foreclosure or seizure of assets. However, this is a temporary measure and does not equate to debt forgiveness. The company's ability to navigate through this period without triggering the terms that would end the forbearance is pivotal. Stakeholders should pay close attention to the full text of the Waiver Amendment as disclosed in the Form 8-K for any additional covenants or conditions that could affect the company's operations or financial flexibility.

Market Research Analyst

From a market perspective, CURO's announcement is an indicator of stress within the consumer finance industry, which may be experiencing headwinds such as increased default rates or regulatory pressures. The fact that the company has entered into forbearance agreements suggests a need to closely examine the consumer credit market for similar patterns of distress. The extension of the waiver may have a stabilizing effect on the company's stock in the short term, as it alleviates immediate concerns of default or bankruptcy. However, the long-term market sentiment will likely hinge on CURO's ability to address its financial challenges and the overall health of the consumer finance sector.

Investors should consider the potential impact of CURO's situation on similar companies within the industry, as it could signal wider market trends. For instance, if CURO's financial difficulties are symptomatic of a larger credit issue, other consumer finance companies might also be at risk. Conversely, CURO's successful navigation through this period could serve as a positive benchmark for the sector.

CHICAGO--(BUSINESS WIRE)-- CURO Group Holdings Corp. (OTC: CURO) (“CURO” or the “Company”), an omni-channel consumer finance company serving consumers in the United States and Canada, today announced that it has received notice on behalf of certain holders of the Company’s 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “1.5L Noteholders”) and certain holders of the Company’s 7.500% Senior Secured Notes due 2028 (the “2.0L Noteholders”) that the requisite 1.5L Noteholders and requisite 2.0L Noteholders, in each case, consent to an extension of the scheduled expiration date under the forbearance agreements entered into on March 1, 2024 (the “Amendments to the Forbearance Agreements”) and that lenders (together with the 1.5L Noteholders and the 2.0L Noteholders, the “Lenders”) holding at least a majority in amount of term loans under the Company’s 1.0 Lien Credit Agreement (the “Credit Agreement”) have delivered an amendment (the “Waiver Amendment”) to the March 1, 2024 waiver of certain events of default under the Credit Agreement to extend the scheduled waiver expiration date thereunder.

Under the terms of the Amendments to the Forbearance Agreements and the Waiver Amendment, the Lenders have agreed not to exercise any remedies against the Company and its affiliates until March 25, 2024, subject to certain terms and conditions.

Additional details regarding the Amendments to the Forbearance Agreements and the Waiver Amendment are set forth in the Form 8-K filed by the Company with the SEC today, which includes the full text of Waiver Amendment. The Form 8-K is available on the SEC’s Edgar website as well as the Company’s website.

About CURO

CURO Group Holdings Corp. (OTC: 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240315284654/en/

Investor Relations:

Email: IR@curo.com

Source: CURO Group Holdings Corp.

FAQ

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

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

What agreements were extended by CURO Group Holdings Corp.?

CURO Group Holdings Corp. extended forbearance agreements and a waiver amendment with lenders.

Until when is the extension of forbearance agreements and waiver amendment effective?

The extension of forbearance agreements and waiver amendment is effective until March 25, 2024.

What is the purpose of the extension of forbearance agreements and waiver amendment?

The extension is to address default events under credit agreements with lenders.