NFI Group adjusts covenants of $1.25 billion and £50 million revolvers

By Wendy Van Sickle

Columbus, Ohio, July 29 – NFI Group Inc. has amended its $1.25 billion senior revolving credit facility with Bank of Nova Scotia as administrative agent and its £50 million revolving credit facility with HSBC UK as administrative agent, according to a press release.

The amendments provide covenant relief and additional flexibility to reflect NFI’s trailing 12-month financial results and its expected financial performance for the remainder of 2022 and 2023.

NFI’s banking partners have relaxed the total leverage ratio and interest coverage ratio for the remainder of 2022 and fiscally 2023, but NFI will have to meet three additional covenants, including a minimum cumulative adjusted EBITDA, a minimum liquidity and a net debt to capitalization ratio.

The minimum cumulative adjusted EBITDA is set at less than $45 million starting in Q4 of 2022, rising to $80 million in Q2 of 2023 and to $125 million in Q2 2023, after which it will no longer be in effect.

The minimum is $300 million for Q2 of 2022, decreasing to $250 million in Q3 of 2022 and then to $50 million in Q1 of 2024 and thereafter.

The total net debt to capitalization ratio must be less than 0.70 to 1.00 in Q2 of 2022 and 0.60 to 1.00 in Q3 of 2022, after which it will no longer be in effect.

The company said that it believes that with the amended credit facilities, its cash position and capacity, anticipated future cash flows and access to capital markets will be sufficient to fund operations, meet financial obligations as they come due and provide the funds necessary for capital expenditures, dividend payments and other operational needs, including the temporary build-up of work-in-process inventory from supply chain disruptions.

Bank of Nova Scotia, BMO Capital Markets and National Bank Financial Inc. are the joint bookrunners for the $1.25 billion revolver.

The two co-lenders and mandated lead arrangers on the £50 million revolver were HSBC UK and Bank of America, Canada Branch.

NFI Group is a bus manufacturer based in Winnipeg, Man.

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