Subsequent Events

9 Months Ended

Oct. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Termination of Covenant Relief Period. As previously disclosed, on June 5, 2020, the Company and the lenders entered into a Third Amendment (the “Third Amendment”) to the Fourth Amended and Restated Loan and Security Agreement, dated as of October 30, 2015, by and among the Company, as parent and guarantor, Conn Appliances, Inc., Conn Credit I, LP and Conn Credit Corporation, Inc., as borrowers, certain banks and financial institutions named therein, as lenders, and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders. The Third Amendment, among other things, (1) waived the two interest coverage covenants for the period ended on April 30, 2020 and for subsequent periods through the date on which the Company delivers financial statements and a compliance certificate for the quarter ended January 31, 2021 or such earlier date as the borrowers may elect to terminate such relief period upon 10 business days’ prior written notice, the “Covenant Relief Period”; (2) added a minimum liquidity covenant of $125.0 million at any time during the Covenant Relief Period; (3) added a minimum availability covenant requiring at any time during the Covenant Relief Period that the borrowers maintain availability under the revolver equal to the greater of (a) 25% of the lesser of (i) the borrowing base and (ii) the revolver commitments and (b) $75.0 million; and (4) included temporary restrictions, applicable only during the Covenant Relief Period, prohibiting the borrowers from, among other things, (a) making acquisitions and certain other investments, (b) making certain non-ordinary course restricted payments and (c) prepaying certain indebtedness.

On November 16, 2020, the Company gave the lenders under the Third Amendment the required 10 days’ notice to terminate the Covenant Relief Period. As a result, the Covenant Relief Period ended on November 30, 2020.

Cash Tender Offer. On November 30, 2020, the Company announced a cash tender offer for up to $100.0 million aggregate principal amount of its Senior Notes (the “tender offer”) for the total consideration of $980.00, in cash, per $1,000 principal amount of Senior Notes, which includes an early tender payment of $30.00 for holders who validly tender their notes (and do not validly withdraw) prior to 5:00 p.m., New York City time, on December 11, 2020 (the “early tender deadline”). Holders who validly tender their notes after the early tender deadline but on or prior to 11:59 p.m. on December 28, 2020 (the “final expiration date”) will be entitled to receive $950.00, in cash, per $1,000 principal amount of notes accepted for purchase. Settlement of Senior Notes tendered prior to the early tender deadline is scheduled to occur on or shortly after December 14, 2020. Settlement of any Senior Notes tendered in connection with the final expiration date is scheduled to occur on or shortly after December 30, 2020. The Company has reserved the right, subject to compliance with applicable laws, to amend, extend or terminate the tender offer at any time and for any reason.