Curo Group enters RSA, commences voluntary Chapter II reorganization

CURO Group Holdings announced that, on March 22, 2024, it entered into a Restructuring Support Agreement that is supported by holders of more than 74% of each of: loans under the Company’s First Lien Credit Agreement, the Company’s 7.500% Senior 1.5 Lien Secured Notes due 2028 and the Company’s 7.500% Senior Secured Notes due 2028. To implement the terms of the RSA, CURO and certain subsidiaries have filed for voluntary relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. Prior to commencing the Chapter 11 Cases, the Company also commenced solicitation of the 1L Lenders, the 1.5L Noteholders, the 2L Noteholders and holders of CURO’s common stock for votes for a prepackaged joint plan of reorganization of the Company and certain of its subsidiaries, which Plan has been filed contemporaneously with the filing of the Chapter 11 Cases. CURO also intends to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act. The RSA sets forth terms for a consensual restructuring plan that is expected to reduce the Company’s debt by approximately $1 billion, saving the Company approximately $75 million in cash interest annually and enabling CURO to invest in long-term growth. CURO branches are open, operating as usual and continuing to serve customers in the U.S. and Canada. Customer loans are unaffected by the filing. A steering committee comprised of funds managed by Oaktree Capital Management, Caspian Capital LP, and Empyrean Capital Partners led negotiation of the RSA on behalf of creditors. CURO has filed a number of customary motions with the Bankruptcy Court to ensure that its operations continue uninterrupted while its balance sheet is restructured. CURO has also received a commitment of up to $70 million of new capital in the form of debtor-in-possession financing from certain of the Company’s prepetition stakeholders, subject to satisfaction of certain customary conditions. The DIP financing, which is subject to court approval, is expected to support the Company’s ongoing operations during the court-supervised process. Given the broad support of lenders, CURO expects to receive Bankruptcy Court approval of a Plan of Reorganization and Disclosure Statement expeditiously and it expects to emerge from the restructuring process in no later than 120 days. In connection with the Chapter 11 Cases, the applicable non-debtor subsidiaries of the Company also entered into waivers and amendments with the lenders under the Company’s existing loan receivables securitization programs. These accommodations ensure that such securitization programs remain in effect notwithstanding the filing of the Chapter 11 Cases and are able to continue, with certain negotiated modifications, following the Company’s emergence from Chapter 11.