PROG Holdings, Inc. 8-K

What Happened
PROG Holdings, Inc. (PRG) filed an 8-K on January 2, 2026 reporting a Fourth Amendment to its Credit Agreement (originally dated November 24, 2020, with JPMorgan Chase as administrative agent). The amendment provides for a $125 million incremental term loan; proceeds, together with $135 million of revolving borrowings and cash on hand, were used to finance the Acquisition and related costs. The Term Loan ranks pari passu with the existing revolving loans and matures on November 15, 2029. The amendment also updates loan pricing, unused-commitment fees and certain covenants, and permits receivables/warehouse financing for specified special-purpose subsidiaries of the acquired business.

Key Details

• $125.0 million incremental term loan (matures November 15, 2029).
• $135.0 million revolver borrowings used with term loan and cash to fund the Acquisition.
• Interest pricing options: (i) SOFR + margin of 1.50%–2.75% (based on total net leverage) or (ii) base rate + margin (1.00% lower than SOFR margin).
• Unused revolving commitment fees updated to 0.25%–0.50% (based on leverage).
• Leverage covenant revised: max total net leverage of 3.25x for FY2026, 3.00x for FY2027, and 2.50x thereafter.
• New $150.0 million restricted payment basket added; amendment permits certain receivables/warehouse financings and designates related special-purpose subsidiaries as unrestricted subsidiaries.

Why It Matters
This amendment provides committed financing to complete PROG’s acquisition while keeping the new term loan on equal footing with the existing revolver (pari passu). Investors should note temporary loosening of leverage limits for 2026–2027, which allows higher indebtedness near term, and the addition of a $150M restricted-payment basket that can affect future cash returns (dividends or repurchases). Borrowing costs will vary with leverage and SOFR/base-rate choices, so interest expense sensitivity depends on the company’s leverage profile and market rates. The company furnished a related press release as Exhibit 99.1; the full amendment will be filed as an exhibit to PROG’s 2025 Form 10‑K.