The Lion Electric Company, a manufacturer of all-electric medium and heavy-duty urban vehicles, entered into a credit agreement providing for a new revolving credit facility in the maximum principal amount of $100 million with a syndicate of lenders represented by National Bank of Canada as administrative agent, lead arranger and sole bookrunner. The syndicate also includes Bank of Montreal and Desjardins Capital Markets.
“While our recent transaction provided us access to the capital required to accelerate our growth strategy, this new credit facility will enable us to benefit from additional funds at an attractive rate, as needed, thus strengthening our liquidity position for the long term,” Marc Bedard, CEO and founder of Lion Electric, said. “Our intent is to use it, as needed, for working capital, capital expenditure requirements and general corporate purposes.”
The credit agreement provides for a committed revolving credit facility bearing interest at a floating rate by reference to the Canadian prime rate or the CDOR rate and/or bankers’ acceptances, if in Canadian dollars, or the U.S. base rate or LIBOR, if in U.S. dollars, as applicable, plus the relevant applicable margin. The obligations under the credit agreement are secured by a first priority security interest, hypothec and lien on substantially all of Lion’s and its existing subsidiaries’ property and assets (subject to certain exceptions and limitations).
The credit agreement includes certain customary affirmative covenants, restrictions and negative covenants on Lion’s and its subsidiaries’ activities, subject to certain exceptions, baskets and thresholds. The credit agreement also provides for customary events of default, in each case subject to customary grace periods, baskets and materiality thresholds. Finally, the credit agreement also requires Lion to maintain certain financial ratios.
