EDMONTON, Oct. 6 /CNW/ - AutoCanada Income Fund ("AutoCanada") (TSX:ACQ.UN) announced today that it has signed an agreement with HSBC Bank Canada ("HSBC") whereby HSBC shall provide AutoCanada with a $20,000,000 revolving loan ("The HSBC facility"). The HSBC facility will be used to refinance the existing non-revolving five year term loan facility with Chrysler Financial Canada ("The CFC facility"). The CFC facility required significant principal repayments, matured on June 30, 2014 and bore interest at 11.36% until June 30, 2012, subject to an annual interest rate adjustment at the discretion of the lender on June 30, 2012 and June 30, 2013. The HSBC facility is a 365 day fully committed, extendible revolving loan. The HSBC facility's maturity date is 365 days from the initial advance, however, upon maturity, the repayment of the outstanding balance is due 365 days from the maturity date. The HSBC facility may be extended for an additional 365 days prior to the maturity of the facility at the request of AutoCanada and upon approval by HSBC. The HSBC facility will bear interest at HSBC's Prime Rate plus 1.65% (currently 3.90% at the date of this release).
Pat Priestner, Chairman and CEO of AutoCanada Income Fund stated: "The Fund is very pleased to have signed an agreement with HSBC which will significantly strengthen our balance sheet and cash flow. The new credit facility will allow us to repay our CFC non-revolving term loan facility and eliminates the need to make annual loan repayments of $4.3 million dollars over the next five years. By replacing this loan, we expect to have more flexibility over the timing of our future cash flows and will realize substantial savings due to the decrease in the interest rate from the previous facility. Due to the improved covenants in our new credit facility, we also anticipate to have greater flexibility in our strategic and operating business decisions. We are excited to continue our long term relationship with Canada's leading international bank and one of the world's largest banking and financial services organizations."
AutoCanada is Canada's only publicly traded entity with interests exclusively in the operation of franchised automobile dealerships. Through its 53% interest in AutoCanada LP, it presently owns or manages 22 franchised automobile dealerships in six provinces and has over 1,100 employees. Through its owned and managed dealerships, it currently sells Chrysler, Dodge, Jeep(R), Infiniti, Nissan, Hyundai, Subaru, Volkswagen and Mitsubishi branded vehicles. In 2008, its owned and managed dealerships sold approximately 23,700 vehicles, processed approximately 277,300 service and collision repair orders in 284 service bays, and generated revenue of approximately $827 million.
Additional information about AutoCanada Income Fund is available at www.sedar.com and the Fund's website at www.autocan.ca.
SOURCE AUTOCANADA INCOME FUND
For further information: For further information: Tom Orysiuk, CA, Executive Vice-President and Chief Financial Officer, Phone: (780) 732-3139, Email: firstname.lastname@example.org