Debt

6 Months Ended

Mar. 31, 2021

NOTE 8: DEBT

The following table presents the Company's debt instruments outstanding:


	March 31, 2021						March 31, 2020						September 30, 2020
(in thousands)	Gross Amount		Debt Discount and Issuance Costs		Carrying Amount		Gross Amount		Debt Discount and Issuance Costs		Carrying Amount		Gross Amount		Debt Discount and Issuance Costs		Carrying Amount

2024 Convertible Notes	$	143,750	$	(23,443)	$	120,307	$	143,750	$	(29,554)	$	114,196	$	143,750	$	(26,557)	$	117,193
2025 Convertible Notes	172,500		(35,664)		136,836		172,500		(42,876)		129,624		172,500		(39,336)		133,164
8.5% unsecured debt due 2024*	—		—		—		983		—		983		872		—		872
CASHMAX secured borrowing facility*	—		—		—		281		(529)		(248)		—		—		—
Total	$	316,250	$	(59,107)	$	257,143	$	317,514	$	(72,959)	$	244,555	$	317,122	$	(65,893)	$	251,229
Less current portion	—		—		—		267		—		267		213		—		213
Total long-term debt	$	316,250	$	(59,107)	$	257,143	$	317,247	$	(72,959)	$	244,288	$	316,909	$	(65,893)	$	251,016

* Amount translated from Guatemalan quetzals and Canadian dollars as of applicable period end. Certain disclosures omitted due to materiality considerations.

The following table presents the Company's contractual maturities related to the debt instruments as of March 31, 2021:


	Schedule of Contractual Maturities
(in thousands)	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years

2024 Convertible Notes*	$	143,750	$	—	$	—	$	143,750	$	—
2025 Convertible Notes*	172,500		—		—		172,500		—

	$	316,250	$	—	$	—	$	316,250	$	—

* Excludes the potential impact of embedded derivatives as discussed below.

The following table presents the Company's interest expense related to the Convertible Notes for the three and six months ended March 31, 2021 and 2020:


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2021		2020		2021		2020

2024 Convertible Notes:
Contractual interest expense	$	1,033	$	1,033	$	2,066	$	2,066
Amortization of debt discount and deferred financing costs	1,572		1,457		3,114		2,886
Total interest expense	$	2,605	$	2,490	$	5,180	$	4,952

2025 Convertible Notes:
Contractual interest expense	$	1,024	$	1,024	$	2,048	$	2,048
Amortization of debt discount and deferred financing costs	1,853		1,722		3,672		3,413
Total interest expense	$	2,877	$	2,746	$	5,720	$	5,461

2.875% Convertible Senior Notes Due 2024

In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”). The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2024 Convertible Notes will be entitled to receive cash equal to the principal of the 2024 Convertible Notes plus accrued interest.

The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $39.8 million, ($25.3 million, net of tax). The effective interest rate for the three and six months ended March 31, 2021 was approximately 9%. As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $10.00 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $10.00 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share.

If, among other triggers described in the 2017 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2024 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021. As of March 31, 2021, the if-converted value of the 2024 Convertible Notes did not exceed the principal amount.

2.375% 2025 Convertible Senior Notes Due 2025

In May 2018, we issued $172.5 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”). The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375% per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with the terms prior to such date. The carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) included in “Additional paid-in capital” in our condensed consolidated balance sheets as of March 31, 2021 was $49.6 million, ($39.1 million, net of tax). The effective interest rate for the three and six months ended March 31, 2021 was approximately 9%. As of March 31, 2021, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion.

The 2025 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2018 Indenture, based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of $15.90 per share of Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent the average share price is over $15.90 per share for any fiscal quarter or year-to-date period, we are required to recognize incremental dilution of our earnings per share.

If, among other triggers described in the 2018 Indenture, the market price of the Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2025 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2025 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of March 31, 2021. As of March 31, 2021, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount.

CASHMAX Secured Borrowing Facility

In November 2018, we entered into a receivable's securitization facility with a third-party lender to provide funding for installment loan originations in our Canadian CASHMAX business. We terminated this facility in September 2020 as part of the closure of the operations of our CASHMAX business. See our 2020 Annual Report for additional information regarding the closure of our Canadian operations.