NFI Group (NFI), a leader in propulsion-agnostic bus and coach mobility solutions, announced that it and certain of its subsidiaries have entered into a new revolving credit facility (the First Lien Facility) with a total borrowing limit of $845 million, which includes $300 million in letter of credit availability.
The First Lien Facility is secured, and has a two-year term, that can be extended for an additional two years if NFI enters into certain additional subordinated credit arrangements. It refinances and replaces the Company’s existing first lien senior term and revolving credit facilities, which had a total combined borrowing limit of approximately $801 million, and will be effective upon completion of certain wire transfers being made within the next day.
“Our new credit facility provides us with improved covenants, increased liquidity and greater financial flexibility. The facility’s term and visibility also position us well as we execute on our record backlog and drive operational performance,” said Brian Dewsnup, Chief Financial Officer, NFI Group. “We were pleased to see the strong support of our banking partners to put this improved facility in place. We look forward to continuing to work with them as we evaluate other refinancing opportunities that further support our goal of improving liquidity and lowering total interest expense.”
Loans under the First Lien Facility bear interest at a rate equal to SOFR or U.S. base rate for loans denominated in U.S. dollars, CORRA or a Canadian prime rate for loans denominated in Canadian dollars, SONIA for loans denominated in pounds sterling, and EURIBOR for loans denominated in euros, plus an applicable margin to those rates.
The First Lien Facility is structured to allow for more relaxed covenants, additional credit enhancements (such as an accordion feature), removal of the minimum liquidity requirement and an extension of the tenor, in the event that the Company enters into certain additional subordinated credit arrangements within the initial two-year term. If completed, the additional subordinated credit arrangements would be used in part to permanently reduce the borrowing limit of the First Lien Facility.
National Bank of Canada is the Administrative Agent under the First Lien Facility and National Bank Financial Inc., Bank of Nova Scotia, BMO Capital Markets, Canadian Imperial Bank of Commerce, and TD Bank are the Co-Lead Arrangers. The First Lien Facility has been syndicated, with the lenders comprised of affiliates of the five Co-Lead Arrangers and five other financial institutions, all of whom were parties to the previous credit facilities.