Decibel Cannabis gets C$30 million credit facilities via Connect First

By Wendy Van Sickle

Columbus, Ohio, Jan. 4 – Decibel Cannabis Co. Inc. closed C$30 million of credit facilities with Connect First Credit Union Ltd., according to a news release.

The credit facilities include $28.5 million of term debt and a C$1.5 million authorized overdraft to repay Decibel’s existing debt of C$26.8 million.

The credit facilities mature five years from the funding date and amortize over a 10-year term. Decibel’s prior debt was on average a five-year amortization term.

The term debt bears interest at 4.75%, and the authorized overdraft bears interest at Prime plus 100 basis points, reflecting a blended rate reduction of about 1.7%.

The credit facilities have two annually tested financial covenants, a minimum debt service coverage ratio of 1.4 times and a maximum debt-to-equity ratio of 0.75 times, which start following Decibel’s 2021 year-end. The debt-to-equity ratio will step down to 0.5 times in 2022.

The credit facilities also have a minimum monthly current ratio covenant of not less than 1.25 times.

The cannabis company is based in Calgary, Alta.

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