Normal course repayments increase liquidity, pay down debt facilities
Another Watch List account moves toward successful restructuring
TORONTO, Jan. 12, 2016 /CNW/ - Callidus Capital Corporation ("Callidus" or the "Company") (TSX: CBL), today updated the market regarding borrowers' repayments.
During December 2015 alone, two loans were fully repaid in accordance with their original terms. One of the loans, for $25.1 million of a $25.1 million facility, was originated in April 2014 and was repaid in full in 21 months. The second loan, which reached a maximum $22.9 million of a $28.2 million facility, was originated in February 2014 and was repaid in full in 23 months. Given the continued growth in the book since the IPO and the average expected duration, repayments in the normal course are expected to accelerate as the book continues to grow. As at January 7, 2016 the pipeline of potential new loans increased to approximately $640 million, relative to our November 5, 2015 press release.
Newton Glassman, Callidus' Executive Chairman and Chief Executive Officer commented "We are updating the market on these loans not because their repayment is out of the ordinary, but to help provide insight into our typical loan cycle and because it demonstrates the consistent value of our proprietary loan origination systems and processes. We investigate and evaluate every factor possible in managing our credit quality – it is the foundation for our business plan. Ultimately full loan repayment is the normal course of business for Callidus Capital, sometimes with the help of a court process. In fact, during the first quarter of 2016, we expect two to three more of our borrowers will also repay us in full under normal terms."
Callidus has demonstrated a history of prudent risk management. As disclosed in Callidus' 2015 Q3 release, since 2006, Callidus has advanced 100 loans representing total credit facilities of $2.0 billion of which 60 loans have been fully repaid or realized. Since 2006 there have been realized losses of $15 million (approximately 0.3% annually of commitments, averaged over nine years). Of the 60 loans, 52 loans were fully repaid, in some cases after informal loan restructurings, while five went through a form of restructuring and were then fully repaid.
David Reese, President and Chief Operating Officer of Callidus said "These repayments increased our liquidity and the collected funds were put to use in the normal course including, among other areas, paying down a portion of our debt and funding future loan growth initiatives. We remain committed to our growth objectives, as stated during our IPO, of doubling the book every two to three years."
Mr. Glassman added, "In addition, Callidus is very close to successfully restructuring another loan from the "watch list" for full value. As a consequence, Callidus expects full normal repayment of this account over time. As we have often stated in the past Callidus uses a variety of techniques to mitigate potentially challenging situations and to minimize any risk of loss, and this situation illustrates that an overwhelming majority of those efforts are successful."
About Callidus Capital Corporation
Established in 2003, Callidus Capital Corporation is a Canadian company that specializes in innovative and creative financing solutions for companies that are unable to obtain adequate financing from conventional lending institutions. Unlike conventional lending institutions who demand a long list of covenants and make credit decisions based on cash flow and projections, Callidus credit facilities have few, if any, covenants and are based on the value of the company's assets, its enterprise value and borrowing needs. Callidus employs a proprietary system of monitoring collateral and exercising control over the cash inflows and outflows of each borrower, enabling Callidus to very effectively manage risk of loss.
Certain statements made herein contain forward-looking information. Although Callidus believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. Furthermore, the forward-looking statements contained in this press release are made as at the date of this press release and Callidus does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.
SOURCE Callidus Capital Corporation
For further information: David Reese, President and Chief Operating Officer, (416) 945-3016, [email protected], www.calliduscapital.ca