OTTAWA, Sept. 25 /CNW/ - OFI Income Fund (TSX: OFB.UN), a producer of
fibreglass insulation products, today announced that it has signed an
agreement with its current banking syndicate extending and increasing its
total credit facility.
Under the agreement, the banking syndicate, comprising Scotiabank Group
and CIBC, is increasing the existing facility of $40 million to $45 million
and is extending the loan maturity from the current expiry of September 1,
2008 to September 1, 2009.
Further, the agreement includes a number of changes that are favorable to
the Fund, including an increase in the debt to EBITDA(*) covenant from 2:0 to 1
to 2.75 to 1 and the elimination of current restrictions on the Fund's capital
expenditures (no minimum or maximum amounts). Current costs of the facility
are unchanged for OFI and may vary over time depending on the financial
condition of the Fund.
"We have enjoyed an excellent relationship with Scotiabank and CIBC and
are very pleased to have reached this new agreement extending our credit
facility nearly a year in advance of when they would have expired and on terms
that we consider to be fair and favorable to the Fund and its unitholders,"
said Joseph Skarzenski, President and Chief Executive Officer.
"This extension and increased financing capacity at favorable terms is
very welcome at a time when our industry is feeling the effects of the
slowdown in construction, particularly in various U.S. markets. We appreciate
the support of our bankers and the recognition they are giving to the historic
performance of OFI and the inherent strength of our business," he said.
The newly extended credit facility comprises:
- a secured credit facility consisting of a non-revolving term loan of
$36 million (previously $12 million term loan and $24 million
- a revolving operating line of $9 million (previously $4 million).
The non-revolving term loan was applied toward the acquisition of OFI
Holdings at the time of the creation of the Fund and its initial public
offering on September 1, 2005. OFI used the balance of the facility to fund
the design, construction, commissioning, and start-up costs for its new
fibreglass insulation manufacturing plant in Tillsonburg, Ontario. OFI plans
to open the plant when it has determined that North American construction
markets have strengthened to a level that demand and pricing for fibreglass
products warrant increasing production capacity.
Certain statements contained in this news release constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Fund's future outlook and
anticipated events, the Fund's business, its operations, its financial
performance, its financial condition or its results. Particularly, statements
regarding the Fund's future operating results and economic performance, the
Fund's objectives and strategies to achieve those objectives, are
forward-looking statements. While these statements are based on certain
factors and assumptions that management considers to be reasonable based on
information currently available to it, they may prove to be incorrect. Forward
looking-information is also subject to certain factors, including risks and
uncertainties described in our Annual Information Form, many of which are
beyond management's control, that could cause actual results to differ
materially from what management currently expects. Therefore, future events
and results may vary significantly from what management currently foresees.
You should not place undue importance on forward-looking information and
should not rely upon this information as of any other date. While the Fund may
elect to, it is under no obligation (and expressly disclaims any such
obligation) and does not undertake to update or alter this information at any
(*) EBITDA - References to EBITDA are to earnings before interest, taxes,
amortization and unrealized foreign exchange (gain)/loss on cash and cash
equivalent, unrealized (gain)/loss on derivative instruments and non-
controlling interest. However, EBITDA is not a recognized measure and
does not have a standardized meaning under GAAP.
About OFI Income Fund
Since 1980, OFI has been manufacturing and distributing a broad range of
fibreglass insulation products, including fibreglass ceiling tiles, designed
for thermal and acoustical applications and destined for the Canadian, U.S.,
and international residential and non-residential/industrial markets. OFI
operates under a low-cost structure and has been profitable for the past 23
years. Additional information is available at www.sedar.com or the company's
website at www.ofigroup.com.
For further information:
For further information: Catherine Skarzenski, Executive Vice President
and Chief Financial Officer, Tel. (613) 247-7116, Fax (613) 736-7281, e-mail