Carfinco Repays Subordinated Debt
EDMONTON, June 19, 2014 /CNW/ - Carfinco Financial Group Inc. ("Carfinco" or the "Company") announces that effective today, Carfinco repaid all outstanding subordinated debt ("sub-debt") provided by third parties to its US subsidiary, Persian Acceptance Corp. ("PAC"). The total amount of sub-debt currently provided to PAC is $5.8 million US dollars and carries an annual interest rate of 13%. Under the terms of the sub-debt agreements, the sub-debt may be repaid at any time without penalty.
"By repaying the outstanding sub-debt held by its US subsidiary, Carfinco will realize pre-tax interest cost savings of approximately $575,000 in Canadian funds on an annualized basis", stated Mr. Tracy Graf, CEO of Carfinco. "This is a substantial savings for Carfinco and moves our financial leverage ratio to approximately 2.40:1. This brings the financial leverage ratio closer to management's expectations of 3.0:1, yet retains flexibility to pursue additional opportunities."
About Carfinco Financial Group Inc.
Carfinco, through its Canadian and United States subsidiaries (collectively, "Carfinco"), focuses on providing indirect consumer vehicle loans to borrowers unable to obtain financing through traditional lending sources. A network of select independent and franchise dealerships offer the Subsidiaries payment plans to their customers who must, along with the vehicle, meet the Subsidiaries underwriting guidelines. The shares of Carfinco trade on The Toronto Stock Exchange under the symbol "CFN".
Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements.
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