Daily News: June 21, 2012

Frontera Investment Raises $10 Million of New Capital


Frontera Investment, Inc., announced it has entered into two separate investment transactions, which together will provide the company $10 million of new capital funding with which to grow its business.

The first transaction is a new $5 million senior credit facility from Salus Capital Partners. The proceeds of this credit facility will be used to repay existing, higher interest rate indebtedness and to provide the company with additional lending capacity to grow the gold buying and gold pawn business lines.

The second transaction is a $5 million preferred stock investment from MRC Capital Group, an existing investor in Frontera. The proceeds of this equity investment will be used to repay existing indebtedness and to finance growth in Frontera’s core business through a series of new store acquisitions.

“We are very pleased to announce these two transactions,” said Gilbert Partida, Frontera’s president and CEO. “They mark an important step in our business as we look to leverage the systems we have built over the past nine years to accomplish our mission of providing our customers with products that reduce the cost of basic financial transactions for the un-banked market in the United States.”

As contemplated in the preferred stock purchase agreement, representatives of MRC Capital Group will occupy three of Frontera’s five Board of Director seats with Benjamin Yogel, MRC Capital Group’s managing partner, becoming the co-chairman of the Board along with Partida.

“We are thrilled to expand our existing investment in Frontera,” said Benjamin Yogel. “Two years ago we made an initial investment in the company and have been impressed with the company and its management team during the tenure of our investment. We see a clear market opportunity for Frontera to leverage its existing systems by adding new stores through acquisition onto the company’s technology platform. Our new equity investment, coupled with Salus’ new credit facility, will provide the company with the liquidity to accomplish this growth strategy.”

“We are excited to partner with Frontera and its sponsor, MRC Capital Group,” said Marc S. Price, SVP, Loan Originations and Corporate Strategy of Salus Capital. “As a subsidiary of Harbinger Group, Inc., we seek to align ourselves with companies and sponsors that have a unique business model that differentiates them from the competition. Frontera’s advanced technology and commitment in providing financial services to the un-banked consumer is consistent with our approach.”

Frontera is an alternative financial services company that serves the large and fast-growing low-cost consumer finance market.