/NOT FOR DISTRIBUTION TO UNITED STATES OR FOR DISSEMINATION IN THE
HALIFAX, Feb. 4 /CNW/ - (TSX: CLR.UN, CLR.DB.B, CLR.DB.A):
Clearwater refinances senior debt facilities providing a number of
Timely funding for capital expenditure plan
Removes exposure to ISK debt
Increases operational liquidity
Increases financial flexibility
Provides capacity to expand hedging program
Removes all near-term debt maturities
No increase in annual cash interest costs
Results in a substantial improvement in capital structure
Today Clearwater Seafoods Limited Partnership ("Clearwater"), which is
54.27% owned by Clearwater Seafoods Income Fund (the "Fund"), announced
that it has successfully completed a refinancing of its senior debt
This refinancing will increase Clearwater's' Senior Term Credit Facility
("Senior Notes") from Canadian $51.5 million to Canadian $70 million,
extend the maturity date of its existing Asset Backed Revolving Loan
("ABL") and create a new US $45 million Second Lien Senior Credit
Facility ("Second Lien Facility")
GE Capital Markets, Inc. and GE Capital Markets (Canada) Ltd acted as
sole Lead Arranger for the ABL, Senior Notes and Second Lien Facility.
GE Capital in Canada is the Agent for the ABL and Senior Notes.
Prospect Capital is agent for the Second Lien Facility.
The proceeds of this refinancing will be used to repay and cancel
Icelandic Krona denominated debt facilities and provide working capital
for ongoing corporate needs.
This refinancing provides a number of substantial benefits to Clearwater
Funding for capital expenditures plan - this refinancing provides Clearwater up to Canadian $10 million to
fund a substantial refit program for its vessels in 2011 during the
off-peak harvest time of the year, which should have a positive impact
on harvest costs in 2011 and allow Clearwater to sell one factory
vessel in 2011.
Removes exposure to Icelandic Krona debt - as part of the refinancing all ISK denominated debt will be settled
removing exposure to the Icelandic Krona and CPI in Iceland.
Increases operational liquidity - the completion of this transaction will result in excess of $18
million being applied to reduce amounts owing on Clearwater's ABL
providing Clearwater with greater flexibility in funding day-to-day
Increases financial flexibility - provisions in the new lending agreements provide greater covenant
flexibility and adjust the timing of certain cash flow sweeps providing
Clearwater with greater financial flexibility.
Provides capacity to expand hedging program - In conjunction with this financing, Clearwater will expand its
hedging program allowing it to enter into approximately CDN $125 to
$150 million of forward contracts. This will enable Clearwater to
hedge approximately 50% to 60% of its annual net exposure.
Removes all near-term debt maturities - With this refinancing, Clearwater has no material debt maturities
until 2013. However, the loan agreements give Clearwater the
flexibility to prepay the Senior Notes and, after the Senior Notes are
repaid, repay the Second Lien Facility provided certain conditions are
met and the nominal break fees are paid.
Improvements obtained with no increase in annual cash interest costs - the companies new Senior Notes and ABL facilities carry lower
interest rates which will offset higher interest rates on the Second
Lien Facility resulting in no material additional cash interest costs.
Mr. Ian Smith, CEO of Clearwater commented "This refinancing results in
a substantial improvement in our capital structure which will allow our
management team to focus on growing our business and creating long-term
value for our unitholders.
Ellis Gaston, Managing Director of Corporate Finance Canada at GE
Capital, added "Structuring expertise and industry knowledge allows GE
to customize financing solutions to help customers meet their business
objectives. As their longstanding lender, we understand Clearwater's
business strategy and are pleased to provide them with the capital and
flexibility they need to grow."
Richard Carratu, Managing Director in New York, commented "Prospect
Capital Corporation is pleased to have the opportunity to provide
Clearwater Seafoods a $45,000,000 Second Lien Facility and to be part
of the Company's strategy going forward."
Clearwater is recognized for its consistent quality, wide diversity and
reliable delivery of premium seafood, including scallops, lobster,
clams, coldwater shrimp, crab and ground fish.
Since its founding in 1976, Clearwater has invested in science, people,
technology, resource ownership and resource management to preserve and
grow its seafood resource. This commitment has allowed it to remain a
leader in the global seafood market.
SOURCE CLEARWATER SEAFOODS INCOME FUND
For further information:
Robert Wight, Chief Financial Officer, Clearwater, (902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor Relations, Clearwater, (902) 457-8181