TORONTO, Dec. 23, 2014 /CNW/ - Callidus Capital Corporation ("Callidus" or the "Company") (TSX: CBL) today provided an update on its business activities.
Growth in Portfolio
We are pleased to report that as at December 23, 2014, our gross loan commitments totalled $970 million. From those loan commitments, a total of $823 million has been advanced and remains outstanding. This represents an increase of $71 million in loan advances from December 4, 2014, the last date we provided an update, and an increase of $442 million from December 31, 2013. As previously communicated, it was our intention to inform the market when the size of the loan portfolio changed by approximately $65 - $75 million, which may be adjusted as the size of the portfolio changes.
Callidus' deal pipeline of potential loans has remained relatively stable with a total value of approximately $454 million, of which $187 million represents term sheets that have been signed back by the borrowers. As previously disclosed, Callidus undertakes extensive due diligence before closing on a loan transaction and has historically closed on 60% to 80% of signed back term sheets.
Despite the growth in the loan portfolio, the actual losses experienced in the portfolio continue to remain below the level experienced at the time of the Company's initial public offering - both in absolute amounts and as a percentage of gross loans receivable - and below amounts previously reserved. Management believes this reflects its conscious effort to maintain the credit quality while continuing to grow the business.
Two of the Company's borrowers have emerged, or are expected to emerge shortly, from normal course court supervised restructuring processes which management believes has resulted in an enhanced position for Callidus. In one instance, the restructuring was undertaken as part of Callidus' original loan approval process and in the other instance the process was initiated by Callidus as a means of protecting and improving the overall value of Callidus' collateral. The latter of these loans was on Callidus' "watch list" at the time of the Company's initial public offering and, as a result, the full amount of the principal is guaranteed by funds managed by The Catalyst Capital Group Inc. until repayment in full. Management believes that the successful completion of these strategic filings has benefitted Callidus.
Expansion of Revolving Senior Credit Facility
Callidus is currently in the process of expanding its existing USD $200 million revolving senior credit facility that matures April 10, 2018. Two major Canadian chartered banks have committed an aggregate of USD $62.5 million and are expected to join the syndicate which would increase the facility to USD $262.5 million. The syndication is expected close in early January 2015. It remains management's goal to increase this facility as the gross loans receivables increases.
David Reese Appointed President
Callidus also announced that David Reese, the Chief Operating Officer of the Company, has been appointed President and Chief Operating Officer effective as of December 19, 2014.
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 inflow and outflows of each borrower, enabling Callidus to very effectively manage any risk of loss.
This press release contains references to gross loans receivable, which is not a generally accepted accounting measure under International Financial Reporting Standards and therefore the definition used by the Company may differ from the definition of such term used by other entities. The Company defines "gross loans receivable" as the sum of (i) the aggregate amount of loans receivable on the relevant date, (ii) the loan loss allowance on such date, (iii) the book value of assets held for sale as they appear on the balance sheet, and (iv) discounts on loan acquisitions. Management believes that gross loans receivable is a useful supplemental measure that may assist purchasers in assessing the financial performance and the cash anticipated to be generated by the Company's business. Gross loans receivable should not be considered as the sole measure of the Company's performance and should not be considered in isolation from, or as a substitute for, analysis of the Company's financial statements.
Forward Looking Statements
Certain statements made herein contain forward-looking information. Forward-looking statements in this release include those related to expected growth in the loan portfolio, repayment of the bridge loan and sufficiency of sources of liquidity. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements of Callidus, or developments in Callidus' business or industry, to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. Such factors and assumptions include, but are not limited to, Callidus' inability to successfully originate new loans due to competitive factors or adverse developments in the asset-based loans market; the availability of additional financing on acceptable terms, or at all, being dependent on capital market conditions and the operating performance of Callidus; the continued availability of funding under bridge loan facility provided by Catalyst Funds and Callidus' existing loan facilities; and other factors and assumptions discussed in the section entitled "Risk Factors" in documents filed with the Ontario Securities Commission and other securities commissions across Canada, including Callidus' prospectus dated April 15, 2014. If any such risks actually occur or assumptions prove to be incorrect, Callidus' business, financial condition or results of operations could be materially adversely affected. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which 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 laws.
SOURCE: Callidus Capital Corporation
For further information: David Reese, President and Chief Operating Officer, (416) 945-3016, [email protected], www.calliduscapital.ca