AutoCanada entered into a new credit agreement providing secured credit facilities of up to $1.08 billion, subject to certain conditions precedent to funding. Scotiabank led the facility, with CIBC, RBC, HSBC and ATB participating in the syndicate.
Upon closing, the new three-year credit agreement will increase the company’s borrowing capacity and provide $660 million for floorplan and lease financing, $350 million for acquisitions and capital expenditures and $70 million for general corporate purposes.
The new facility replaces AutoCanada’s existing $550 million syndicated floorplan facility and $250 million syndicated revolving credit agreement. The key financial covenants associated with the new facility are similar to the existing facilities that are being replaced.
“This new credit facility will provide AutoCanada with the flexibility to continue to grow and acquire dealerships, finance our business and maintain a prudent approach to leverage. We thank all of our lending partners for their support in completing the syndication and their continued vote of confidence in our success,” said Chris Burrows, AutoCanada senior vice-president and CFO.
AutoCanada is Canada’s largest multi-location automobile dealership group by volume. It currently operates 54 franchised dealerships in eight provinces, with over 3,500 employees.