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WFCF Canada Agents Tembec’s New Asset-Based Loan

November 19, 2015, 07:59 AM
Filed Under: Forest Products

Tembec announced it has entered into a new asset-based secured revolving credit facility which consists of a $150 million revolving credit facility with Wells Fargo Capital Finance Corporation Canada, as administrative agent, and PNC Financial Bank, National Association as syndication agent, and a U.S.$ 62 million "first-in, last-out" term loan. The New ABL Facility replaces the company's existing $175 million revolving credit facility.

The revolving facility will expire on November 18, 2020, provided several conditions are met, including the repayment of the FILO Facility prior to March 2, 2018, failing which the maturity would be accelerated to an earlier date, but no earlier than March 2, 2018. The revolving facility has a first priority charge over the receivables and inventories of the company's Canadian and U.S. operations. The FILO facility is secured by the same collateral as the revolving facility and ranks second in repayment priority relative to the revolving facility.  The FILO Facility is also secured by a first priority charge on the fixed assets of one of the company's U.S. subsidiaries.

The company will use borrowings under the New ABL Facility to repay the Existing Facility and pay transaction fees and expenses. After giving effect to the refinancing, the company's total liquidity (cash and available operating lines) will be approximately 112 million.

Tembec is a manufacturer of forest products – lumber, pulp, paper, and specialty cellulose – and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has approximately 3,250 employees and annual sales of approximately $1.5 billion.

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