Western Forest Products transitioned its current credit facility into a $250 million sustainability-linked credit facility.
As part of the transition, the maturity of the amended credit facility is extended to July 21, 2025, and will continue to include an accordion feature that allows Western Forest Products to increase the aggregate amount available up to $350 million, subject to lender approval. The pricing grid and covenant package of the amended credit facility is consistent with the current credit facility and will provide increased flexibility for Western Forest Products to execute on its strategic priorities.
The amended credit facility incorporates incentive pricing terms that can reduce or increase Western Forest Products’ borrowing costs by up to five basis points based on the outcome of various sustainability-linked goals. Western Forest Products selected goals that are linked to improving health and safety performance, increasing workforce diversity and advancing mutually beneficial first nation relationships.
“Our sustainability-linked credit facility further demonstrates Western’s strong leadership and commitment to industry leading sustainability and ESG practices,” Don Demens, president and CEO of Western Forest Products, said. “By aligning the borrowing costs of our credit facility directly to sustainability-linked goals, we are holding ourselves accountable to continuous improvement and advancement of our sustainability and ESG initiatives.”
The company plans to utilize the amended credit facility to support the execution of its strategic growth initiatives and for general corporate purposes.
Royal Bank of Canada acted as sole bookrunner, co-lead arranger, administrative agent and sustainability structuring agent for the facility, partnering with Western Forest Products to integrate the sustainability-linked goals into the amended credit facility. The lending syndicate also included The Bank of Nova Scotia as co-lead arranger, Canadian Imperial Bank of Commerce, Well Fargo Bank and TD Bank.