RED DEER, AB, June 28 /CNW/ - RIFCO Inc. (TSX.V-RFC) today announced that it has secured a new annual facility of $10 million for the purpose of securitizing non-traditional auto loan receivables from an Alberta Regional Credit Union (ARCU).
RIFCO is in the midst of substantial growth. Plans and preparations for aggressive loan origination growth rates of 50 to 100% are underway. The Company has just completed doubling of its sales force in order to fulfill requests, by dealers, for RIFCO financing. RIFCO's employees in all departments will be required to continue their exceptional performance in order to support the rapid growth in assets under management. Recruitment and training of new staff and premise renovations are currently underway.
RIFCO maintains two other annual securitization facilities. A facility has been in place with Securcor Trust for $30M since 2005. A second facility was added in September 2009 for $30M from a schedule 1 Canadian Chartered Bank. RIFCO expects to maintain and utilize all three facilities which now total $70 million. In the last reported 12 months RIFCO originated $30M in loans.
A third funding source improves the Company's overall access to funds. It is expected that multiple sources will ultimately provide for a lower cost of funds and stronger value creation for shareholders. Access to increasing amounts of low cost capital is important in fueling the Company's aggressive growth aspirations.
This ARCU has indicated its intent to seek a syndicate with other Alberta Credit Unions. The ARCU has been granted limited rights to pursue such a syndicate with the goal of achieving a larger facility for RIFCO.
Securitization is the manner in which RIFCO funds a percentage of its loan originations. Regular sales of loan receivables to funding partners, in which the Company is not a beneficiary, provide cash resources for new originations. RIFCO continues to service all sold loan contracts and maintains a retained interest in the loans through a performance-based holdback.
RIFCO is party to an agreement with ARCU pursuant to which RIFCO may transfer secured vehicle loans to ARCU for payment in an amount calculated pursuant to the agreement. The agreement provides that RIFCO may request the transfer of loans from time to time, up to a total facility amount of $10 million.
RIFCO is one of Canada's fastest-growing automotive finance companies. Non-traditional auto loans are indirectly originated through a growing network of selected new and used vehicle dealers operating in all provinces except Saskatchewan and Quebec.
The common shares of RIFCO INC. are traded on the TSX Venture Exchange under the symbol "RFC". There are 19.23 million shares (basic) outstanding and 20.63 million (fully diluted) shares.
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Certain information contained in this press release, including information and statements which may contain words such as "potentially" "objective", "estimates", "would", "will", "contemplates", "expects" and similar expressions and statements relating to matters that are not historical facts, are forward-looking information including, but not limited to, information as to future performance.
SOURCE RIFCO INC.
For further information: For further information: RIFCO INC., Lance A. Kadatz, Vice President and Chief Financial Officer, Telephone: 1-403-314-1214 EXT 111, Fax: 1-403-314-1132, Email: firstname.lastname@example.org, Website: www.rifco.net