NFI Group proposes amending, extending debt facilities in refinancing plan

By Mary-Katherine Stinson

Lexington, Ky., May 10 – NFI Group Inc. announced details of a proposed comprehensive refinancing plan which would include amending its existing senior secured credit facilities, extending its senior unsecured debt facilities with the government of Manitoba and Export Development Canada and raising additional funds through the sale of new common shares and a second-lien debt financing, according to a press release.

NFI said it received credit approval from its banking partners for the proposed amendments to the company’s existing North American senior secured credit facility and its senior secured U.K. credit facility.

The proposed amendments include:

• Converting the $1 billion revolving North American facility to a $400 million first-lien term loan and a $361 million first-lien revolving credit facility with a total combined borrowing capacity of $761 million;

• Extending the maturity of the North American facility to April 30, 2026 from Aug. 2, 2024;

• Converting the £40 million revolving U.K. facility to a £16 million term loan and a £15 million revolving credit facility with a total combined borrowing capacity of £31 million;

• Extending the maturity of the U.K. facility to April 30, 2026 from June 30, 2023;

• Stipulating that the lenders’ first-lien security interest under the secured facilities will cover all present and future assets of NFI and its subsidiaries including mortgages on select owned manufacturing facilities; and

• Putting in place new financial covenants for the term of the secured facilities, including a waiver of leverage tests through the third quarter of 2024.

The amendments are subject to negotiation of binding documentation and several precedent conditions, including a planned equity sale and second-lien debt financing.

The government of Manitoba and Export Development Canada have also both confirmed their intention to extend the maturity of their respective C$50 million and $50 million senior unsecured debt facilities to April 30, 2026.

In addition, Export Development Canada has also made available a $100 million guarantee facility to support NFI’s surety and performance bonding requirements for new vehicle contracts.

With a proposed decrease in the total borrowing capacity under the amended facilities and to support additional liquidity requirements, NFI plans to raise proceeds of $150 million of equity capital through the sale of new common stock and to raise total gross proceeds of between $200 and $250 million from a second-lien debt financing.

The company expects to wrap negotiations and close all the plan components before the expiration of the company’s current financial covenant waivers under the secured facilities and the maturing of the U.K. facility, both of which occur on June 25. If the plan is not finalized by then, the company said it will need to seek an extension.

All of the financing transactions are mutually conditional.

BMO Capital Markets is acting as the company’s financial advisor related to the equity transaction and second-lien debt financing.

Bank of Nova Scotia is the administrative agent for the North American facility. Bank of Nova Scotia, BMO Capital Markets and National Bank Financial Inc. are the joint bookrunners.

The North American facility syndicate also includes Canadian Imperial Bank of Commerce, Bank of America, Canada Branch, Wells Fargo Bank, NA, Canadian Branch, Toronto Dominion Bank, HSBC Bank Canada, Export Development Canada and ICICI Bank Canada.

ATB Financial is expected to join the North American facility syndicate in replacement of MUFG Bank Ltd., Canada Branch, upon execution of the amended agreements.

For the U.K. facility, HSBC U.K. acts as administrative agent and HSBC U.K. and Bank of America, Canada Branch are the two co-lenders and mandated lead arrangers.

NFI is global provider of sustainable bus and motor coach solutions headquartered in Winnipeg, Man.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.