NFI finalizes terms for $200 million second-lien debt, updates on refinancing

By Wendy Van Sickle

Columbus, Ohio, July 25 – NFI Group Inc. said it has finalized indicative terms for a $200 million second-lien debt financing and provided an update on the expected timing to complete a previously announced comprehensive refinancing, according to a news release.

The company expects to concurrently close all elements of the refinancing plan by Aug. 31, rather than by Aug. 2 as announced previously. NFI said additional time is required to document and complete the second-lien debt and finalize all closing procedures of the mutually conditional transactions included within the refinancing plan.

To support the updated timing, NFI has requested, among other things, an extension of the date for the completion of the required amendments and the financial covenant waivers under the company’s existing North American senior secured credit facility and its U.K. senior secured credit facility to Aug. 31. NFI anticipates that it will receive the requested relief prior to July 31.

To date, under the refinancing plan NFI has:

• Received confirmation of credit approval from its banking partners for proposed amendments to the secured facilities with revised maturity dates extending to April 30, 2026;

• Secured $225 million of equity commitments through a combination of a private placement transaction, which was approved by shareholders on June 27 and for which regulatory approvals have been received, and a bought deal public offering of subscription receipts to be exchanged for common shares of NFI on completion of the refinancing plan;

• Received confirmation of intention to extend the maturity of Manitoba Development Corp.’s and Export Development Canada’s senior unsecured debt facilities to April 30, 2026, with both facilities’ extensions subject to final approvals and documentation; and

• Finalized indicative terms for the planned $200 million second-lien debt financing.

Second-lien debt

The indicative terms for the second-lien debt include an annual coupon at the higher end of the previously disclosed expected range of 12% to 15%, payable semiannually, with a maturity of five years.

The second-lien debt financing is expected to be completed with a group of investors and expected to be closed concurrently with the other components of the refinancing plan.

The debt will be senior secured second-lien obligations of NFI and its material subsidiaries, which will rank behind the secured facilities and all other first-lien secured indebtedness of NFI and such subsidiaries, rank ahead of any subordinated obligations of NFI and its subsidiaries, and, by virtue of being secured, rank ahead of any unsecured obligations.

The second-lien debt financing is subject to negotiation of binding documentation.

For the second quarter of 2023, NFI expects that the financial results will reflect revenue of $640 million to $660 million; adjusted EBITDA of $10 million to $12 million; and a net loss of $48 million to $52 million, representing a net loss of $0.62 to $0.67 per share and expected adjusted net loss per share of $0.45 to $0.50.

The company said that while it finalizes its refinancing plan, which it expects to significantly improve its liquidity position, it remains focused on cash management and liquidity. NFI is executing on efforts to reduce inventory and accelerate customer payments, including the pursuit of advance payments and deposits from customers, wherever possible, and exploring other potential opportunities to generate cash flows.

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

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