Asset

America Car Mart Announces Pricing of Inaugural Asset-Backed Securitization Transaction and Amendment to Loan and Security Agreement – Form 8-K

America’s Car-Mart, Inc. Announces Pricing of Inaugural Asset-Backed Securitization Transaction and Amendment to Loan and Guarantee Agreement

Rogers, Arkansas (April 25, 2022) – America’s Car-Mart, Inc. (NASDAQ: CRMT) (the “Company”) announced today that it has priced $400 million aggregate principal amount of asset-backed notes ( the “Notes”), a subprime asset-backed auto loan securitization transaction. The Notes will be issued in four classes, secured by loans directly issued by the Company’s operating subsidiaries, America’s Car Mart, Inc. and Texas Car-Mart, Inc. (collectively “Car Mart”), with expected ratings of AA – to BB – by Kroll Bond Rating Agency (“KBRA”), and have a final maturity date of April 20, 2029. The credit enhancement for the Notes will consist of an overcollateralisation, reserve account funded with an initial amount of ‘at least 2.00% of the Pool Balance on the Cut-Off Date, excess interest on claims and, in the case of Class A Notes, Class B Notes and Class C Notes, the subordination of certain payments to Noteholders of Notes’ less senior categories. Additional ticket details are as follows:

Initial capital amount

Initial credit enhancement

Fixed coupon rate (per year)

Preliminary KBRA Ranking(1)

Class A tickets

$

236,000,000

60.70%

3.23%

YY- (fs)

Class B tickets

52,000,000

51.60%

4.47%

A- (fs)

Class C tickets

74,570,000

38.55%

5.48%

BBB- (fs)

Class D tickets

37,430,000

32.00%

8.58%

BB- (fs)

Total

$

400,000,000

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(1)

The KBRA adds an indicator (sf) to the ratings assigned to structured finance bonds.

The notes were priced with a weighted average fixed coupon rate of 5.14% per annum until the scheduled clean-up call. The Notes will be issued by ACM Auto Trust 2022-1 (the “Issuer”), an indirect subsidiary of the Company. The Issuer will be the sole debtor of the Notes; the Notes will not be obligated or guaranteed by the Company or any of its other affiliates or subsidiaries. Car Mart will act as the auto loan receivables manager securing the Notes. The net proceeds of the Notes will be used to pay outstanding debt, make the initial deposit into a reserve account and for other general purposes. The expected settlement date for the transaction is April 27, 2022.

“We are delighted to diversify our funding sources by entering the securitization market. This transaction represents an important step as we prepare for continued growth,” said Jeff Williams, President and Chief Executive Officer of the Company. “Going forward, this market will give us better access to credit with a more efficient capital structure.”

The Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities law, and may not be offered or sold in the United States in the lack of registration or an applicable exemption, or a transaction not subject to the registration requirements of the Securities Act and applicable state securities laws. The Notes are being offered only to qualified institutional purchasers pursuant to a Rule 144A private offering under the Securities Act.

This press release is not an offer to sell, or a solicitation of an offer to buy, securities, and there will be no sale of such securities in any state or jurisdiction in which the offer, the solicitation or sale would be unlawful prior to registration. or qualification under the securities laws of such state or jurisdiction. Any offer of securities will be made only by means of a complete offering memorandum.

In connection with the Asset Backed Securitization Transaction, the Company has entered into Addendum No. 4 to the Company’s Third Amended and Restated Loan and Guarantee Agreement (the “Agreement”) with BMO Harris Bank , NA, as an agent for a group of lenders. Amendment No. 4 to the Agreement (the “Amendment”) modifies the Agreement to permit the sale, contribution or transfer of vehicle contracts to, and certain buy-backs of such contracts from, an indirect subsidiary purpose of the Company in the context of a securitization transaction, in each case subject to specific conditions. The amendment also replaces LIBOR as the applicable benchmark interest rate for borrowings under the agreement with the simple daily guaranteed overnight funding rate (“SOFR”) and increases the unused line charge rate by 0.25% to 0.375% if the average daily amount unpaid during the previous month is less than 50% of revolver commitments.

About American Car-Mart

America’s Car-Mart operates automotive dealerships in twelve states and is one of the largest public automotive retailers in the United States, focused exclusively on the “Integrated Automotive Sales and Finance” segment of the used car market. The company specializes in the sale of quality used vehicles and offers flexible used car financing options for customers with bad credit, no credit, repossessions or even past bankruptcy and puts the focus on superior customer service and building strong personal relationships with its customers. . The Company operates its dealerships primarily in small towns in the south central United States, selling quality used vehicles and providing financing to substantially all of its customers. For more information about the US Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the future objectives, plans and goals of the Company, as well as the intention, beliefs and expectations Company’s current events regarding future events and operating performance, including statements regarding the proposed private offering of the Notes, and can generally be identified by words such as “may”, “will”, “should”, “could”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “expect” and other similar words or expressions. These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. Accordingly, you are cautioned that these forward-looking statements are not guarantees of future events or performance, and that actual results could differ materially from those projected in these forward-looking statements. s materially differ from the Company’s projections include, but are not limited to:

·

the failure of KBRA to rate the Notes at the expected rating levels, which is a condition to closing the Offer, or at all;

·

changes in financial markets, including changes in credit markets, interest rates, securitization markets generally and more specifically, the securitization offered by the Company;

·

the willingness of investors to purchase the Notes;

·

general economic conditions in the markets in which the Company operates, including, but not limited to, fluctuations in gasoline prices, grocery store prices and employment levels;

·

the availability of credit facilities and access to capital on terms acceptable to us to support the business of the Company;

·

the Company’s ability to effectively underwrite and collect its contracts;

·

reliance on existing management; ability to attract, develop and retain qualified general managers;

·

the availability of quality vehicles at affordable prices for customers;

·

changes in consumer credit laws or regulations, including, but not limited to, rules and regulations that have recently been enacted or may be enacted by the federal and state governments;

·

ability to keep pace with technological advances and changes in consumer behavior affecting the Company’s business;

·

security breaches, cyberattacks or fraudulent activities; and

·

the ability to successfully identify, complete and integrate new acquisitions.

In addition, risks and uncertainties that could affect future results and events include those described from time to time in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

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contacts:

Jeff Williams, CEO at (479) 464-9944 or Vickie Judy, CFO at (479) 464-9944