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World Acceptance Violates Two Debt Covenants
Subprime lender gets free pass from its lenders.
November 6, 2022
World Acceptance Corporation (WRLD), a subprime installment lender, revealed that on October 25, 2022 it “became aware” it was no longer in compliance with its revolving credit agreement for the quarter ending September 30, 2022.
The company violated the Fixed Charge Coverage, 2.14 to 1.0, and the Collateral Performance Indicator was 24.48% — both higher than the revolver allows. In its latest quarterly filing, World Acceptance its lenders are fine with the non-compliance:
“On October 26, 2022, the Company entered into a waiver letter with its lenders named in the revolving credit agreement, pursuant to which its lenders agreed to waive the Existing Non-Compliance. The Company has not received a notice of default, a notice of termination or declaration of acceleration of amounts due with respect to the outstanding balance of the loan from the lenders.”
Related: RM, ATLC, ENVA, OCSL
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