Sagard Credit Partners (SCP) closed a $16 million senior secured term loan with Nxt-ID, a technology product and services developer that focuses on security and encryption.
The proceeds of the term loan will be used to refinance Nxt-ID’s existing revolving loan facility, pay for accrued interest and costs associated with the refinancing and provide ongoing working capital for future capital expenditures and general corporate purposes.
Key features of the term loan include:
- Interest rate of LIBOR + 9.5%, with savings in annual interest expense of approximately $2 million a year as compared to the terms and conditions of the previous revolving loan facility and based on current interest rates
- Maturity date of May 24, 2023
- No mandatory debt amortization
Nxt-ID also issued two common stock purchase warrants to SCP, exercisable for a period of five years and for an aggregate of 244,081 shares of the company’s common stock.
“This transaction significantly lowers our interest rate which will significantly increase our cash flow,” said Nxt-ID CEO Gino Pereira. “It provides stability to our balance sheet and improves our overall financial position, which will help serve as a catalyst for future growth. This is a positive step forward for the company.”
“We are very pleased to work with NXT-ID management on this refinancing transaction,” said Mustafa Humayun of SCP. “We look forward to fostering a long and mutually beneficial relationship with the company and supporting potential future growth needs.”
SCP provides direct credit financing to public and private middle market companies across Canada and the U.S. Its products include term loans, notes, debenture financing and other bespoke solutions.