Car-Mart increases borrowing power by $30 million amid COVID-19 pandemic
by March 24, 2020 9:01 am 938 views
Bentonville-based America’s Car-Mart will borrow an additional $30 million from its lender group in the midst of uncertainty in global markets because of the COVID-19 pandemic, according to a filing with the U.S. Securities and Exchange Commission.
The buy here, pay here used car dealer provided notice March 18 to its lender group that the company would borrow the additional money under the agreement with the lenders and might continue to borrow as needed, according to the Monday (March 23) filing.
The company is borrowing the additional money “as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of the current uncertainty in the global markets due to the global pandemic,” the filing shows. The company plans to use the money for working capital, ongoing operations and general corporate purposes.
Car-Mart established the third amended and restated loan and security agreement on Sept. 30, 2019. The agreement allowed for total permitted borrowings of $241 million, and it expires on Sept. 30, 2022. The lending group includes BMO Harris Bank, with a $71 million commitment; Wells Fargo Bank, with a $30 million commitment; BOKF NA, which recently rebranded from Bank of Arkansas, with a $50 million commitment, up from $44 million; First Tennessee Bank N.A. with a $40 million commitment, up from $30 million; Arvest Bank, with a $30 million commitment, up from $25 million; and Commerce Bank, with a $20 million commitment.
Car-Mart recently established a task force to respond to the COVID-19 pandemic, and its stock price hit a 52-week low of $35.18 on March 18. Car-Mart stock (NASDAQ: CRMT) closed Monday at $39.16, down $1.27 or 3.14%. In the past 52 weeks, the stock has ranged between $129.70 and $35.18.