Macro Enterprises finalized its new $145 million senior secured credit facilities announced in April. HSBC Bank Canada is the lead lender, and acted as agent to the lending syndicate that includes National Bank of Canada and Bank of Montreal.
The credit facilities have a three-year term, and comprise a $65 million revolving credit facility, with availability subject to a margining, and an $80 million letter of credit facility, the latter backed by Export Development Canada performance security guarantee insurance. The new revolving facility will provide Macro with enhanced flexibility and access to the funding essential to support its expanding portfolio of large-scale project opportunities. The letter of credit facility will provide for the issuance of standby letters of credit to backstop the company’s performance guarantees that are a customary feature of its construction business.
The borrowing rate pricing grid provides for a range of spreads over HSBC prime rate (or, if applicable, HSBC’s US base rate), set with reference to the company’s senior debt-to-EBITDA ratio, making the initial borrowing rate spread 50 bps. The rate spread is subject to quarterly review, and possible increase up to 125 bps. The standby letter of credit facility rates, set with reference to the same ratio, range from 125 bps to 200 bps.
The company has the right, subject to customary conditions, to increase the amount of the revolving facility by up to $20 million and to increase the letter of credit facility by up to $10 million, bringing the total credit facilities to a maximum of $175 million, by securing increased commitments from one or more of the initial lenders or by securing one or more new lenders.
The facilities are guaranteed by the company, including its subsidiaries (excluding its special purpose subsidiaries), collaterally secured by a first ranking security interest over all present and future acquired assets, property and undertakings of such parties.
Macro’s core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta.
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HSBC Arranges $145MM in Facilities for Macro Industries