Extendicare entered into a new senior secured credit facility for $275 million with a syndicate of Canadian chartered banks, for a term of three years. The facility consists of a revolving credit facility for up to $145 million, which replaces the company’s former demand credit facilities of $112.3 million, and a delayed draw term loan facility in an amount up to $130 million. The revolving facility is available for working capital and general corporate purposes, including capital expenditures and acquisitions. The delayed draw facility is available until April 30, 2025 to repay the company’s outstanding $126.5 million of 5.00% convertible subordinated debentures due April 30, 2025. Extendicare may redeem the 2025 Debentures before their maturity date in April 2025.
“We greatly appreciate the support of our new lending group and their commitment to Extendicare,” David Bacon, senior vice president and chief financial officer of Extendicare, said. “The new credit facilities provide additional flexibility in our capital structure to support our growth objectives in our home health care and managed services businesses and successfully execute on our long-term care redevelopment program.”
The senior secured credit facility includes provisions for consecutive one-year extensions of the initial three-year term, and the ability to increase the revolving facility by up to $50 million, subject in each case to satisfying certain conditions and lender approval. The senior secured credit facility is secured by a portfolio of LTC homes in Ontario and is subject to customary financial and non-financial covenants and other terms. Borrowings under the senior secured credit facility can take place by way of direct borrowings at either the prime rate or the Canadian Overnight Repo Rate Average (CORRA) plus an applicable margin, or through letters of credit.
Canadian Imperial Bank of Commerce (CIBC) is the administrative agent, while CIBC and Bank of Montreal are joint bookrunners and joint lead arrangers. The lending syndicate consists of CIBC, Bank of Montreal, Royal Bank of Canada, The Toronto-Dominion Bank and National Bank of Canada. Extendicare was represented by Torys and lenders were represented by McCarthy Tétrault.
