FP Canadian Newspaper renews C$30 million debt agreement via HSBC

By Toni Weeks

San Luis Obispo, Calif., March 11 – FP Canadian Newspaper LP renewed its debt agreement with HSBC Bank Canada on Jan. 8, according to a fourth quarter 2014 results report from holding company FP Newspapers Inc.

The agreement, which was to mature on Jan. 31, 2016, was extended to Jan. 31, 2020 and includes a maximum principal balance of C$30 million on Jan. 31, 2018 and C$20 million on Jan. 31, 2020.

The terms of the renewal agreement includes a C$6.3 million principal repayment at closing and annual principal repayments of C$1 million due on June 1 along with a cash sweep to be paid no more than 90 days after the end of each fiscal year, with the first cash sweep due March 31, 2016 for the 2015 financial year.

The cash sweep is equal to the lesser of C$3.5 million and 25% of the company’s annual distributable cash.

With the renewed agreement, the company must adhere to a maximum leverage ratio of 3.5:1.0 prior to Jan. 31, 2018, which steps down to 3.0:1.0 after that. It also must maintain a current ratio of no less than 1.2:1.0 measured quarterly on a trailing 12-month basis.

Vancouver, B.C.-based FP Canadian Newspaper publishes, prints and distributes daily and weekly newspapers and specialty publications primarily in Canada.

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