Regional Management Corp. enters new $355 million credit facility, amends warehouse agreements

Published 25/08/2025, 22:14
Regional Management Corp. enters new $355 million credit facility, amends warehouse agreements

Regional Management Corp. (NYSE:RM), a consumer finance company with a market capitalization of $401 million and currently trading near its 52-week high of $40.80, announced Monday that it has entered into a new senior revolving credit facility of up to $355 million, replacing its previous credit agreement. According to InvestingPro data, the company has demonstrated strong momentum with a 26% return over the past six months. The new facility, effective August 19, 2025, was established through a Loan and Security Agreement with a syndicate of banks led by Bank of Montreal as agent, and includes BMO Harris Financing, Banc of California, Texas Capital Bank, EverBank, and First Horizon Bank.

The agreement features an accordion provision, allowing the facility to be expanded up to $420 million. The maximum leverage permitted under the new agreement has been increased to 6.0x from 5.25x in the prior arrangement. The interest rate spread has been reduced to 275 basis points from 310 basis points. Borrowings will bear interest at a rate equal to one-month SOFR, with a floor of 0.50%, plus a 2.75% margin. The facility matures in August 2028 and is secured by certain company assets, including finance receivables and equity interests in subsidiaries.

The borrowing base under the new facility is up to 83% of eligible finance receivables and up to 60% of finance receivables categorized as eligible delinquent renewals, subject to credit quality adjustments. InvestingPro analysis shows the company maintains robust liquidity with a current ratio of 8.22, indicating strong ability to meet short-term obligations. For deeper insights into Regional Management’s financial health and detailed metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. The agreement includes an unused line fee that varies from 0.90% to 0.30% per annum, depending on the average outstanding balance of the facility.

The company also amended four existing warehouse credit agreements with its subsidiaries, including Regional Management Receivables IV, V, VI, and VII, to reflect changes related to the new senior revolving credit facility and to update certain financial covenants and definitions. For example, the financial covenant for debt to tangible net worth in the RMR V Amendment was adjusted to not exceed 6.00 to 1.0.

The previous senior revolving credit facility, which was scheduled to mature on September 20, 2025, and had an aggregate commitment of up to $355 million, was terminated in connection with the new agreement. InvestingPro data reveals the company maintains a "GREAT" financial health score of 3.03, trading at a P/E ratio of 11.52. Additional InvestingPro Tips and detailed financial metrics are available to subscribers, offering valuable insights for investment decision-making.

This information is based on a statement filed by the company with the Securities and Exchange Commission.

In other recent news, Regional Management Corp reported a robust second quarter for 2025, surpassing analysts’ earnings expectations. The company achieved an earnings per share (EPS) of $1.03, significantly higher than the projected $0.72, resulting in a 43.06% earnings surprise. Additionally, Regional Management’s revenue outperformed forecasts, reaching $157 million compared to the anticipated $151.76 million. Despite these strong financial results, the stock saw a minor decline in aftermarket trading. These developments highlight the company’s ability to exceed market predictions in both earnings and revenue. The positive performance reflects well on Regional Management’s operational strategies. Analysts continue to monitor the company’s progress following these results.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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