Conn’s to embark on $700 million securitization transaction

Specialty retailer Conn’s is preparing for its newest round of securitization.



Conn’s has entered into an agreement to securitize approximately $700 million of retail installment contract receivables, with an expected Oct. 6 closing. The face amount of the notes to be issued is $1.12 billion, with an advance rate of 77.5% of the outstanding customer receivables portfolio balance. This equates to approximately 89.5% of net book value at July 31, 2015.



Net book value reflects not only the bad debt reserve, but also interest deferrals, allowances for cash option loans, such as loans on which customers can earn a waiver of interest, and allowances for charged-off interest. Conn's will receive upfront proceeds of approximately $1.08 billion, net of transaction costs and reserves.



The specialty chain operates more than 110 retail locations in Alabama, Arizona, Colorado, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina.