Accord Financial entered into amendments to its primary credit facility with its banking syndicate.
As disclosed in its third quarter report, in November 2023, the company uncovered significant irregularities in collateral reporting by a borrower related to a $14.4 million loan, which led the company to record a specific provision for credit losses relating to this loan. Since that time, the company has been operating under a series of facility agreement waivers, which provided temporary relief from a technical default caused by a reduction in permitted borrowings as a result of the loan. The current amendments modify certain elements of the facility agreement, providing a longer-term resolution through to the facility’s maturity in July 2025.
The amendments reset the total facility limit to be more appropriate to the company’s current tangible equity and current level of borrowings. The facility limit has been reduced from $375 million to $300 million and will be reduced further to $260 million by January 2025. In addition, a minimum availability covenant along with certain financial and operating covenants will result in more conservative leverage overall, which Accord Financial considers prudent in the current economic climate.
