Car-Mart completes $161.3 million securities transaction

Rogers-based America’s Car-Mart Inc. announced Thursday (Dec. 18) that it has completed a $161.3 million securities transaction. The asset-backed notes have an average coupon of 7.02%.

According to a news release, the transaction includes a more efficient deal structure that is expected to generate greater cash flow for the company than previous transactions. Also, a residual cash flow structure will provide the company with monthly cash. This transaction is expected to reduce Car-Mart’s long-term cost of capital by reducing the need for frequent transactions and their associated fees.

“Multi-year strategies to improve our capital structure and operating platform are essential to repositioning Car-Mart for long-term success,” CEO Douglas Campbell said. “Since entering the ABS (asset-backed securities) market in 2022, we’ve made progress improving spreads and the weighted average coupon within legacy deal structures. With the 2025-4 transaction, we are now improving the structure to retain more cash flow in our business and make our ABS program more efficient. This is an important milestone reflecting Car-Mart’s continued evolution as we align our operating improvements with a stronger, more flexible capital structure.”

In August, Car-Mart completed an asset-backed securities transaction that involved issuing $172 million in asset-backed notes with an average coupon of 5.46%. It was the buy here, pay here used car dealer’s eighth securities transaction.

“Our transition to a residual cash flow structure is an important step forward in improving our securitization program,” said Jonathan Collins, chief financial officer. “We expect the long-term benefits to drive meaningful reductions in our cost of capital. The improvements we are making across our capital structure are providing Car-Mart with improved liquidity, better capital efficiency, and more stable funding capacity. We believe these efforts position the business for long-term success and value creation.”

Shares of Car-Mart (NASDAQ: CRMT) closed Thursday at $26.20, down 77 cents or 2.86%. In the past 52 weeks, the stock has ranged between $17.78 and $62.72.