SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
November 9, 2000
(Date of earliest event reported)
ACE CASH EXPRESS, INC.
(Exact name of registrant as specified in its charter)
Texas 0-20774 75-2142963
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization)
1231 GREENWAY DRIVE, SUITE 800
IRVING, TEXAS 75038
(Address of principal executive offices)
(972) 550-5000
(Registrant's telephone number,
including area code)
NOT APPLICABLE
(Former Name or Former Address,
if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On November 9, 2000, the Registrant entered into an Amended and Restated Credit
Agreement with a syndicate of banks led by Wells Fargo Bank Texas, National
Association, as agent (the "Restated Credit Agreement"). The Restated Credit
Agreement amended the Registrant's preceding credit agreement that was entered
into in July 1998. The Restated Credit Agreement renewed and increased the
revolving line-of-credit facility under the preceding credit agreement and
restructured, increased, and amended the term-loan facility under the preceding
credit agreement.
The Registrant's revolving line-of-credit facility under the preceding credit
agreement was renewed and extended until November 8, 2001, and was increased
from a total of $130 million to a total of $155 million. Borrowings under the
revolving credit facility may continue to be used for working capital and
general corporate purposes. Borrowings under the revolving credit facility
continue to bear interest at a variable rate equal to, at the Registrant's
discretion, either the prime rate publicly announced by Wells Fargo Bank or the
London Interbank Offered Rate (LIBOR) plus 0.75%. Interest on the outstanding
principal of the revolving credit facility is payable monthly, except on
LIBOR-rate borrowings; interest on LIBOR-rate borrowings is payable every 30,
60, or 90 days, depending on the period selected by the Registrant. All unpaid
principal and accrued interest under the revolving credit facility is payable on
November 8, 2001. The Registrant must pay the lenders a commitment fee equal to
0.25% per annum of the average daily unused portion of the revolving credit
facility.
The term-loan facility under the preceding credit agreement permitted the
Registrant to borrow (on a one-time, non-revolving basis) up to $35 million for
approximately one year, and the amount borrowed and outstanding at the end of
that period was to become a term loan payable over the succeeding four years.
That facility is now structured (and designated) as a reducing revolving
facility, which allows the Registrant to borrow (and repay and reborrow) amounts
under this facility for three years, until November 9, 2003; and the maximum
amount of credit available to the Registrant is now $65 million, though this
maximum amount is subject to reduction on October 1, 2001, and each quarter
thereafter, in the amount of $4.375 million. Borrowings under the reducing
revolving facility may be used (as the borrowings under the term-loan facility
were) for store construction and relocation and other capital expenditures,
including acquisitions, and refinancing other indebtedness. Borrowings under the
reducing revolving facility bear interest at a variable annual rate equal to, at
the Registrant's discretion, either the prime rate publicly announced by Wells
Fargo Bank plus 0.25% or LIBOR plus 2.375%. This optional LIBOR-based interest
rate for the reducing revolving facility is subject to adjustment quarterly
beginning March 31, 2001, within a range of 2.125% to 2.625% above LIBOR,
depending on the Registrant's debt-to-cash flow ratio as provided in the
Restated Credit Agreement. This optional rate is an increase over the optional
LIBOR-based interest rate for the term-loan facility under the preceding credit
agreement, which was LIBOR plus 1.75%. Interest on the outstanding principal of
the reducing revolving facility is generally payable monthly, except on
LIBOR-rate borrowings; interest on LIBOR-rate borrowings is payable every 30,
60, or 90 days, depending on the period selected by the Registrant. Under the
reducing revolving facility, the principal outstanding in excess of the
quarterly reducing maximum (if any), beginning on October 1, 2001, is payable
upon each reduction, and all unpaid principal and accrued interest under the
reducing revolving facility is payable on November 9, 2003. The Registrant must
pay the lenders a commitment fee equal to 0.375% per annum of the average daily
unused portion of the reducing revolving facility, though this fee is subject to
adjustment for each quarter after March 31, 2001, within a range of 0.3% to 0.5%
per annum of the average daily unused portion of that facility, depending on the
Registrant's debt-to-cash flow ratio as provided in the Restated Credit
Agreement. The Restated Credit Agreement also provides for the Registrant's
required prepayment to the lenders of certain amounts due, and the corresponding
reduction in the lenders' commitments, under the reducing revolving facility
upon certain events, including the sale of assets from which the Registrant has
received net proceeds of a least $5 million during a fiscal year and the
Registrant's issuance of equity securities.
In addition to the revolving credit facility and the reducing revolving
facility, the Restated Credit Agreement provides that, upon certain conditions,
the Registrant has available, from Wells Fargo Bank, a stand-by letter-of-credit
facility of up to $1.5 million and, from Wells Fargo Bank and certain other
lenders, an additional short-term revolving advance facility of up to $25
million. This additional short-term facility is available for a total of up to
15 days in any 12-month period and must be repaid within five days after each
borrowing.
The short-term availability of the revolving credit facility under the Restated
Credit Agreement, like the same facility under the preceding credit agreement,
permitted the Registrant to obtain a lower interest rate and other terms more
favorable than a longer-term facility. The Registrant anticipates that this
facility will be renewed at the expiration of its effective period. There can be
no assurance, however, that the anticipated renewal will be effected. If that
renewal is not effected, the Registrant will have to obtain working-capital
financing from other sources, and that financing might be on terms less
favorable to the Registrant than those set forth in the Restated Credit
Agreement. The Registrant believes that other sources of working-capital
financing would be available to it if necessary; however, if the Registrant were
unable to obtain working-capital financing from one or more other sources, the
Registrant's liquidity and operations would be materially and adversely
affected.
The Restated Credit Agreement may be terminated before the stated expiration or
maturity dates of the revolving credit facility and the reducing revolving
facility -- requiring all unpaid principal and accrued interest to be paid to
the bank lenders -- upon any "event of default" as defined in the Restated
Credit Agreement. The events of default include nonpayment of amounts due to the
lenders under the Restated Credit Agreement, failure to observe or perform
covenants set forth in the Restated Credit Agreement that are not cured, a
change in control of the Registrant, and any event or circumstance that has a
material adverse effect on the Registrant's business, operations, financial
condition, or prospects.
The Registrant is subject to various restrictive covenants stated in the
Restated Credit Agreement. These covenants, which are typical of those found in
credit agreements of this kind, include restrictions on the incurrence of
indebtedness from other sources, restrictions on advances to or investments in
other persons or entities, restrictions on significant acquisitions,
restrictions on the payment of dividends to shareholders or the repurchase of
shares, and the requirement that various financial ratios be maintained.
The Registrant's payment and performance of its obligations under the Restated
Credit Agreement and ancillary documents are secured by liens on all of its
assets. The collateral arrangements are subject to the Amended and Restated
Collateral Trust Agreement dated as of July 31, 1998, that became effective with
the preceding credit agreement. That collateral trust agreement was amended with
the effectiveness of the Restated Credit Agreement primarily to reflect the
restructuring and increase of the term-loan facility under the preceding credit
agreement; the other material terms of the collateral trust agreement in effect
before the Restated Credit Agreement were confirmed upon the effectiveness of
the Restated Credit Agreement. The collateral trust created under the collateral
trust agreement secures the Registrant's obligations to the bank lenders under
the Restated Credit Agreement and to the Registrant's other secured lenders,
Principal Life Insurance Company and Travelers Express Company, Inc. Wilmington
Trust Company is the trustee under the collateral trust agreement. The
collateral trust agreement includes agreements regarding the priority of
distributions to the secured lenders upon foreclosure and liquidation of the
collateral subject to the trust and certain other intercreditor arrangements.
The Registrant's interest expense under the Restated Credit Agreement is
affected by its interest-rate swap agreements with Bank of America, N.A. and
Wells Fargo Bank, Texas, N.A. as described in the Registrant's Quarterly Report
on Form 10-Q for its fiscal quarter ended September 30, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibit is filed herewith in
accordance with the provisions of Item 601 of
Regulation S-K:
10.1 Amended and Restated Credit Agreement dated
November 9, 2000, by and among the
Registrant, Wells Fargo Bank Texas, National
Association, as agent for the lenders named
therein, and the lenders named therein, with
the Schedules (other than the Registrant's
disclosure schedules) and the Exhibits
thereto.
[The signature follows on the next page.]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACE CASH EXPRESS, INC.
(Registrant)
By:
--------------------------
Debra A. Bradford
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
10.1 Amended and Restated Credit
Agreement dated November 9, 2000, by
and among the Registrant, Wells
Fargo Bank Texas, National
Association, as agent for the
lenders named therein, and the
lenders named therein, with the
Schedules (other than the
Registrant's disclosure schedules)
and the Exhibits thereto.
