THE WOODLANDS, TEXAS – Conn’s, Inc., today announced that it has entered into an agreement to securitize an aggregate of $705 million of retail installment contract receivables, with closing expected on or about March 17, 2016.
The offering includes three classes of fixed rate notes: (i) $423,030,000 aggregate principal amount of the Class A asset backed notes are expected to be rated BBBsf by Fitch, (ii) $70,510,000 aggregate principal amount of the Class B asset backed notes are expected to be rated BBsf by Fitch, and (iii) $70,510,000 aggregate principal amount of the Class C asset backed fixed rate notes are expected to be rated Bsf by Fitch.
The face amount of the Class A and Class B notes to be issued in the securitization is approximately $494 million, with an advance rate of 70% of the outstanding customer receivables portfolio balance. Conn’s will receive upfront proceeds with respect to those notes of approximately $478 million, net of transaction costs and reserves. The coupon rate to investors is 4.68% on the Class A Notes and 8.96% on the Class B Notes. The Class C Notes and residual equity will initially be retained by an affiliate of the Company.
The notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The notes will be offered only (i) within the United States to persons who are qualified institutional buyers as defined in Rule 144A under the Securities Act of 1933, as amended, and (ii) solely with respect to the Class A Notes, to certain non‑U.S. persons in offshore transactions in reliance on Regulation S under such Act.
About Conn’s, Inc.
Conn’s is a specialty retailer currently operating approximately 100 retail locations in Arizona, Colorado, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. The Company’s primary product categories include:
*furniture and mattress, including furniture and related accessories for the living room, dining room and bedroom, as well as both traditional and specialty mattresses;
*home appliance, including refrigerators, freezers, washers, dryers, dishwashers and ranges; consumer electronics, including LCD, LED, 3-D and Ultra HD televisions, Blu-ray players, home theater and portable audio equipment; and
*home office, including computers, printers and accessories.
Additionally, Conn’s offers a variety of products on a seasonal basis. Unlike many of its competitors, Conn’s provides flexible in-house credit options for its customers in addition to third-party financing programs and third-party rent-to-own payment plans.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include information concerning the Company’s future financial performance, business strategy, plans, goals and objectives. Statements containing the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” or the negative of such terms or other similar expressions are generally forward-looking in nature and not historical facts.